"Business Russia" stands up for debtors

25 December 2019

The business community requests payment of debts by installments without court hearings. Relevant proposals have been submitted to the Ministry of Economic Development by Business Russia public organization. It is proposed that the debtors will settle their debts with creditors independently, assisted by bailiffs. Under this scheme, the companies will avoid any seizure of their bank accounts and their property will not be auctioned. Will the business people benefit from this situation?

Technically, business people nay can pay out their debts by installments too, but the process is quite complicated. For that, one has to take legal action, with lengthy proceedings, and in the meantime, the businessman may have all his accounts and property arrested, with restrictions to travel abroad. Moreover, in 80% cases the business people have their application rejected, according to data from the All-Russia People's Front. That’s why Business Russia calls for the procedure to be simplified. Bailiffs will help debtors and creditors come to terms.

By the way, parties may now resolve the issue out of court by signing a settlement agreement. But sometimes creditors refuse to accommodate debtors, Dmitry Lobachev, Project Manager of Khrenov&Partners, insists. He suggests the situation will be the same even with bailiffs involved. “There is a problem with companies having an agreement with a pool of banks, with some banks agreeing to settle, and others being tough and insisting on full repayment. That makes it impossible to reach a deal on debt rescheduling: no creditor would wait looking at property being used to repay debt to another creditor”, Mr Lobachev notes.

The full article may be viewed here (in Russian).

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