Skip to content "Defense in Crime" Bar Association
As lawyers, they freed the client from debts to banks.
In the conditions of crisis, Ukrainians have started actively using credit funds, however, not everyone has the ability to repay them on time.
In order to address such situations, at the Legal Center “Law and Finance,” we are starting work in accordance with the Law on Debt Restructuring of Individuals, where the Bankruptcy Procedure Code allows restructuring of an individual’s debt and doing so through the court.
This initiative allows for the write-off of a portion of the debt and partially satisfies the requirements of all interested parties. In the past, in 2020, court decisions were made that actually helped hopeless borrowers to restructure their debt.
Background
The debtor, who borrowed money from PrivatBank and Oschadbank as a pledge for a flat, turned to the Legal Center “Law and Finance” for consultation. Due to the circumstances that arose, the debtor was unable to pay off the debt with interest and penalties for delays, and collectors had already started threatening to seize the flat.
What we started with:
- Gathering evidence: confirming the client’s insolvency. To do this, we collected documents stating that the client did not cross the border or acquire any real or personal property over the past three years.
- During the preparation of the case for consideration, the restructuring manager provided the court with a report that the client owned a two-room apartment, which had already been arrested, according to the requirements of one of the creditors – Oschadbank.
- We requested a property appraisal to determine the market value.
The representatives of the debtor in court were leading lawyers of the Legal Center “Law and Finance” Rostyslav Zhuk and Pokoievich Andrii.
Court decision
A legal assessment of credit agreements and the amount of debt in hryvnias was conducted.
By the decision of the Commercial Court dated December 3, 2020, the FIRST restructuring of an individual’s debt in Ukraine was approved.
In essence, the decision of the case provided for:
- Reducing the debt to PrivatBank from $180,000 to UAH 20,000.
- Debt restructuring with Oshchadbank was carried out, reducing the amount owed from 37,000 USD to 12,000 USD and transferring the debt to Ukrainian hryvnia.
- The outstanding amount was restructured.
- The debtor committed to pay off the debt with a 10% annual interest rate over 15 years, using a property (an apartment) worth 24,000 USD as collateral.
Unfortunately, legislative restrictions prevent the debtor from restructuring the debt independently – only a court decision can change the terms of the credit agreement. The debtor did not have to sell the apartment, and the amount of accrued interest allows them to repay the debt within their income.
Conclusion
The restructuring law works, and for debtors who are tangled up in endless fines and bank payments, it is better to seek legal advice and resolve the matter in court rather than with creditor lawyers.
Considering the results of the first court cases, the following conclusions can be made:
For borrowers
· A real and effective legal mechanism has been developed for settling hopeless debts, including foreign currency loans. There is no need to wait for the bank’s proposals to resolve existing payment problems for months;
· The case preparation and review procedure took 8 months, during which the debtor did not sign an additional insurance contract, did not pay notary fees, and did NOT keep their property.
· Court decisions are mandatory for any financial organization operating in Ukraine. The bank’s consent to restructuring is not required.
For creditors
· The debt settlement mechanism for foreign currency loans allows for restructuring without numerous agreements and permits;
· Real money received in exchange for debt repayment without involving third-party services;
· Debt settlement for willful defaulters.
Undoubtedly, the advantage of restructuring is the possibility for the debtor to reduce debt burden and write off part of the debt.
If you currently have debts that you are unable to pay, contact the experts of the Legal Center “Law and Finance”.
We have experience in restructuring the debts of individuals and will help you get rid of your loans legally.
Get a consultation from an expert.:
+38 (067) 124-12-12
+38 (093) 963-12-12
+38 (0432) 611-577
