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“The team was recently visible advising on a number of pharmaceutical cases. Sources agree that the team is “moving in the right direction” and are particularly impressed by its work in the pharmaceutical sector”.


Do not fear the collectors


Maksym Kopeychykov, attorney at law, partner, Іlyashev & Partners Law Firm

The amazing display of generosity from deputies continues.

In addition to the populist law “On moratorium on foreclosure of citizens’ property provided as collateral for loans in foreign currency” of June 3, 2014, a deputy from the Party of Regions Sergiy Kaltsev proposes to ban the sale of bad loans to collectors.

His draft law amending the law on the protection of consumer rights was registered and is ready for consideration in the Verkhovna Rada.

If this document is adopted, portfolios of distressed consumer loans will not be sold to the collectors.

The Ukrainians seeking to benefit from everything will take advantage of a gift from the parliamentarians to “punish the hated banks”.

What generated such negative assumptions?

Obviously, the majority of Ukrainians will interpret the law as a “possibility not to pay” and that’s what scares bankers and lawyers.

There is no difference in liability of the borrower failing his obligation to the creditor. The borrower bears the same responsibility no matter whether the creditor is a bank or a debt recovery company, and the same sanctions can be applied to him under the contract and law.

From a psychological point of view, it is much more difficult for the debtor to deal with collectors. They are professionals, “tailored” to debt collection. They apply a wide range of instruments of psychological influence.

Unlike a bank, for which debt collection is neither a major nor a favorite activity, for collectors it is the main work. On the other hand, the borrower will agree to restructure the loan much faster with a collector than with a bank. Banks are usually hulky. They have deferred decision-making due to complex restructuring approval and confirmation procedures. For a borrower under consumer loan it is almost impossible to agree on loan debt restructuring with a large bank.

The large bank will not even speak to such borrowers, except when the bank approved a general consumer loan restructuring program. Individual terms of restructuring are almost impossible.

However, you can individually consider each individual case with the collectors and find the right solution to repay or restructure loan. Collectors are more flexible during negotiations and search for solutions than banks.

In our experience, there was a case when the borrower was willing to restructure, but the bank with the European capital could not determine the conditions for three years.

Settlement of the same issue with collectors, which the bank conceded debt, took a month and a half and allowed the client not only to restructure the debt, but also to terminate the obligations under the loan agreement as a whole.

The above example proves that conscientious borrowers experiencing temporary difficulties with repayment do not need to be afraid of collectors. One needs to meet his obligations.

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