- A loan between individuals of more than 170 hryvnias must be in writing.
- Without a written document, witnesses won't help in court.
- A working receipt: both parties' details, the amount in figures and words, the deadline, the borrower's signature.
You lent an acquaintance money. No receipt, because he's one of your own. And he doesn't pay it back.
You go to court, and the court asks: where's the proof you gave him this money at all?
A verbal loan is almost impossible to prove
And here's the worst part. Under the law, a verbal loan and an unprovable loan are almost the same thing.
Article 1047 of the Civil Code: if a loan between individuals exceeds ten tax-free minimums, which is 170 hryvnias, the agreement must be in writing. In practice that's any loan. And if there's no written form, you can't bring witnesses to court: in such disputes the law doesn't allow the agreement to be proven by witness testimony.
The money was handed over, and there's zero evidence.
Four things in a receipt
A working receipt has:
- both parties' full passport details;
- the amount in figures and in words, and the currency;
- a clear repayment date;
- the borrower's signature, ideally written in their own hand.
That holds up in court.
Receipt or loan agreement
| Receipt | Loan agreement | |
|---|---|---|
| Who draws it up | The borrower | Both parties |
| For what amounts | Small, between acquaintances | Large, with interest, between companies |
| Security | Usually none | Pledge, guarantee, penalties |
| Notary | Not needed | Optional, I recommend it for large sums |
If they're already not paying back
First send a written demand for repayment. If there's no receipt but there's correspondence where the person acknowledges the debt, or a bank transfer with a payment reference, you still have a chance.
The cheapest way to get money back is to lend it properly.
Putting money into a friend's business? Then a loan may not be the best option. See the article investor without a contract.
More: loan agreement and receipt.
Frequently asked questions
How long do I have to recover a debt through the courts?
The general limitation period is three years from the repayment date.
What if there's no receipt?
Look for other written evidence: correspondence, a bank transfer, an acknowledgement of the debt. Each case has to be assessed separately.
Can I lend in a foreign currency?
The amount can be stated in a currency. How it will be repaid is best set out separately.
This article is general in nature and is not legal advice. Every situation has its own nuances.
