390,000 Debtors' Accounts and Property Was Seized Without Recourse to Court

Presently, the Unified Registry of Debtors of Ukraine currently lists 390,755 enforcement proceedings opened on the premise of the so-called notarial enforcement deeds instead of court rulings.

To speed up the debt collection process and optimize costs, collectors, pawn offices, loan organizations, and some banks increasingly often turn to notaries to get an enforcement deed—a document letting them block the defaulters’ accounts and seize their property without going to the court. This issue has gained utmost importance as banks are about to start blocking their clients’ accounts on the third-party lender’s request starting July 6.

«The enforcement deed is a convenient lender protection instrument that is easy to obtain and simplifies debt collection than in the case of recourse to the court. However, it is equally likely to be abused. Often, notaries may grant the enforcement deed to dubious organizations and fail to check the documentation required for the deed’s issue. Luckily, the enforcement deed can be challenged in court, and people resort to this measure increasingly often»,

— commented Andrii Hevko, a partner with the Bargen law firm.

«If your accounts get seized under the dubious enforcement deed, and you want to challenge it, first make sure that:

— The enforcement deed was backed by the documentation package as required by law

— The notary checked if your debt was actually indisputable and had documentary evidence

— The loaner provided evidence that it is them that you are in debt to, not some other organization

— No more than three years have passed since the day the debt was incurred

If any of these boxes are unchecked—bring it to court».

Ukrainian debtors show increasing legal literacy: in 2018, 2923 enforcement deeds were overturned against 5,772 in 2020, meaning the figure has doubled over the two years. Over the past year alone, 11,502 enforcement deed overturn rulings were made.

ImageData

Court rulings overturning notary enforcement deeds

Month	June 2018	July	August	September	October	November	December	January 2019	February	March	April	May	June	July	August	September	October	November	December	January 2020	February	March	April	May	June	July	August	September	October	November	December	January 2021	February	March	April	May	June
Court rulings	110	215	178	258	344	304	291	234	237	309	275	275	257	245	179	243	357	353	348	260	356	310	226	298	377	407	400	672	697	945	824	809	1,135	1,465	1,691	1,629	622