Debt collection in Russia

Debt collection process in Russia

The prevailing view is that debt recovery in Russia is impossible due to the specifics of the market, the high level of corruption and the subtleties of the legal system. However, our practice shows that proper planning of debt recovery in Russia, assessment of the debtor's situation and solvency can achieve very good debt repayment results.

Our debt recovery lawyers will help you to recover your debt from your Russian partner or debtor in a legal way. Having experience in specialized debt recovery in Russia and represented state companies and municipalities, parking operators, transportation, sales, financial and construction companies, individual persons in process of debt collection.


With a well-developed debt collection process and a network of trusted partners in Russia, we can offer operate and effective debt recovery. We will assist you with:


  • Operate and qualified evaluation of the debtor including debtor’s financial situation, economic statement and activity, possible danger of bankruptcy or reorganization etc.
  • Pre – trail debt collection in Russia.
  • Trail debt collection in Russia.
  • Debt management services.
  • Purchase of debts in Russia.
  • Preparation of documents recognition of debt as bad and writing off bad debts

Legal regulations of debt collection in Russia


There is no special legal act regulating debt collection in Federation of Russia. However, the relations between creditor and debtor are regulated by general norms of the Civil code, Criminal code and other fundamental laws (regulations of personal data, credit history data, collateral, bankruptcy procedures, information providing etc).


Pre – trail debt collection process


Pre – trail debt collection is very important when talking about debt recovery in Russia. It is process when debt collector evaluates debtor’s financial situation, causes of debt or late payment, searches for operate debt recovery possibilities, presses the debtor in legal ways using various psychological and legal techniques.


Most of debt collecting agencies will offer for you to start litigation and filling of law suit to court. That is because they mostly are attorney companies who works on hourly wages which are very high when collecting foreign debt in Russia (usually 150 – 200 USD per hour and more). If debtor do not recognize the debt, court process could be long and financially expensive. In case of recovery small and medium size debts, expenses for court procedures can easily outperform the debt sum. Even after you have settled your debt in court, there is no guarantee that you will get the debt and expenses recovered. That’s why it is so important evaluate the debtor's solvency (we evaluate the debtor's financial condition and ability to repay the debt including solvency, available assets, debtor's possible actions to prepare for bankruptcy or illegal actions to hide assets, etc.) and have qualified assistance in pre-court debt settlement solutions. We recommend judicial recovery only if there is no possibility of pre-trial debt recovery and considering that the debtor has assets to cover the debt and court costs.


It is not secret, that most of companies or private individuals pays their invoices according to how important the partner is or how much pressure to pay on time they receive. With such type of debtors our main aim it is to achieve that your invoice would be in debtor’s payments list as priority.


However, there are some companies or entrepreneurs that are having their business model based on unpaid debts to their partners and tries to cover their late payments under some temporarily financial problems, various explanations and claims for quality of goods/services provided. Their actions are based on legal loopholes that while debts are not recognized as economical fraud there are civil laws regulated relations between entities or private persons. For such type of debtors our main aim is to show that we will apply measures that will limit their ability to conduct economic activities, making it more beneficial to pay off debts to our clients.


During pre-trail debt collecting process our clients avoid direct conflict with the debtor. It is very important in case you are planning to continue economic relations with your partner or debtor.  In the case of judicial recovery of debts, this is often the end of the relationship between the parties. Also filling of lawsuit to court will be recognized as direct aggression by Russian business men, therefore they can start emotional defensive actions as complaints about quality or performance and prolong the process of debt recovery. Therefore our team main aim is to identify debtor’s problems, to talk in his language and to find operate solution to recover your debt asap as well in lowest expenses.


Due diligence for debt collection actions consistent with the Russian Federation legal regulations


We ensure that our and our partner’s debt collection actions are in accordance with the legal regulations of Russian Federation. We are not performing illegal methods or debt recovery actions like blackmailing and making threats against the debtor, his relatives and property.


Debt management in Russia


No doubt that smart debt management is much better than any debt in Russia.
Foreign entities planning their business in Russia are recommended to keep safety tips that are standard for any business partner in developing markets. We recommend to require the registration certificate of a company, check of partner legal and economic activity address and contact details including website, emails, phone and fax numbers. Investigation of list of shareholders helps avoiding of those partners with shady characters as shareholders however lucrative the business may look.


Trail debt collection process in Russia


In case there were no possibilities to recover the debt in the pre-trail debt collection because the debtor was not cooperating, acting illegally or trying to start procedures of bankruptcy or reorganization, but we see that debtor has economic activity and assets we can recommend trail debt collection in Russia and provide qualified assist in legal process.

Filing a legal suit is the first step. In this step solicitor actions are oriented to ensure control of enough assets of debt payment and court costs including property confiscation and the limitation of legal capacities to prevent debtors from undesirable action. After receiving a court decision, the attorney who handled your case will assist you in process of enforced debt recovery.


Court process in unpleasant for the debtor and has impact for his reputation, therefore publicizing of the court action and informing the debtor’s partners and colleagues as well as professional and financial institutions about his insolvency can be very effective. However, the actions of publicity and informing should be accomplished in accordance with the legal regulations of Russian Federation (private data regulations, credit history regulations etc.).

In case there is sign that debtor is performing illegal or criminal actions (fraud, illegal borrowing, debt evasion etc.), the solicitor can contact state institutions to start criminal case.


Every case of debt recovery in Russia is individual and may need additional review. Please register your debt and we will send you the best offer.


Debt monitoring in Russia


“Had long year partner in Russia, started to work with trust and payment delay and now my Russian invoice is not paid”, “Started to work with respectable company in Russia and now they avoid to pay even first invoice” – such stories are very often heard from our client who faced that business can be very tricky in Russia when it gets to payment on time.


Off course in business you have various situations and in many cases partners works on common trust and emphasis. There could be temporarily problems or partner/client just checking limits of your patience (as mentioned before in Russia lot of businesses pays priority to most important partners/ clients and tries to prolong payment as long as possible).


So what can you do yourself to monitor your invoices and to avoid debts in Russia?


Firstly make sure that you can prove your claim. In Russia, it is advisable to put your agreements in writing. Archive your signed agreements, general conditions, order confirmations, copies of invoices, proof of delivery or services, correspondence with the debtor.


If possible, it is advisable to record agreements and conditions in English and/or the native languages of each party.


If you observed the delay of payment, do not ignore the fact – things can easily go wrong without control and intervention. You should give the notice that you monitor your invoices and delays are not welcomed. We recommend you to immediately send amicable reminder, including detailed description of the invoice and indicating accurate term of payment (we recommend of approximately 7-14 days).


When your Russian business partner does not respond to your amicable reminder, then you need to act expeditiously and hand your debt claim for debt recovery. When creditor monitors their invoices and acts expeditiously most debt collection claims in Russia are covered without trial procedure, mostly in full payment or in the form of a payment arrangement or otherwise.


Why respectable and good reputation debt collection agency in Russia must be your priority?


„Debt Collectors Adopt Mob Tactics” – such and similar quotations from time to time appears in western media like NY Times and others. What for most of us seems so far and exotic in lot of cases are reality in Russia. There are plenty of local debt collection agencies that are using such methods as blackmail, assaults, damaging of property etc.


Off course some of such “Mob tactics” debt collectors get arrested and their companies scrutinized, but gaps in Russia’s personal data protection and banking laws allow many more to operate unhindered.


Such cruel over limited and illegal debt collection actions from time to time appears in Russian and even international media, in some cases there are mentioned creditors as accomplice in such illegal activities.


In response to illegal debt collection actions, anti-collection agencies have appeared. Such companies advise debtors on how to evade debt payment, which is obviously an illegal activity, how to publish illegal actions and which governmental institutions to contact.


It is understandable, that every company or entrepreneur developing their business activities internationally cares about their business good reputation and consistent with legal regulations of Federation of Russia.


We guarantee that our and our partner’s debt collection activities are in accordance with the legal rules of Russian Federation. We are not acting illegal methods or practice debt recovery performing as blackmailing and making threats against the debtor, his relatives and property.