Attorney
Specialist in bankruptcy of individuals and legal entities. Provides legal support in bankruptcy procedures for individuals, private limited liability companies, legal entities, as well as closing executive proceedings, concluding restructuring and settlement agreements with financial institutions
Case: Discharged UAH 300,000 in Debt Through Personal Bankruptcy and Removed All Bank Account Freezes
Service: Personal Bankruptcy and Debt Discharge
Client’s Situation
A client approached the law firm “Prikhodko & Partners” after finding himself in a difficult financial situation due to accumulated loan debt.
His total outstanding debt amounted to approximately UAH 300,000. His creditors included a bank, microfinance institutions (MFIs), and a factoring company.
At first glance, this appeared to be a typical case of overdue loans.
However, the situation was complicated by several factors:
- the total debt owed to multiple creditors had reached approximately UAH 300,000;
- the client was unable to repay the accumulated debt independently;
- enforcement proceedings had been initiated due to overdue payments;
- all of the client’s bank accounts had been frozen;
- the client had effectively lost the ability to freely access and manage his own funds;
- the situation involved ongoing pressure arising from unpaid credit obligations.
The freezing of his bank accounts significantly disrupted the client’s daily life. He could no longer freely manage his finances, while repaying the entire outstanding debt had become financially impossible.
For this reason, the client sought comprehensive legal assistance to resolve his debt problems lawfully, remove the account freezes, and restore financial stability.
What Did We Do?
1. Conducted a Comprehensive Legal Assessment of the Client’s Financial Situation
At the initial stage, our legal team:
- Analyzed the client’s credit obligations,
- identified the structure of debts owed to the bank, MFIs, and factoring company,
- reviewed information concerning enforcement proceedings and asset seizures,
- examined the client’s financial and property status,
- determined the legal grounds for initiating personal insolvency proceedings.
Particular attention was paid to verifying the debtor’s good faith and confirming the absence of undisclosed assets that could affect the court proceedings.
Following this assessment, we decided to initiate personal insolvency proceedings in accordance with the Code of Ukraine on Bankruptcy Procedures.
2. Prepared the Documents Required to Initiate Insolvency Proceedings
We assembled the necessary documentation for submission to the commercial court.
In particular, we:
- collected documents relating to the client’s outstanding credit obligations;
- prepared information regarding the client’s financial position and assets;
- analyzed the existing enforcement proceedings;
- prepared an application to initiate personal insolvency proceedings;
- developed a legal strategy for the court proceedings.
This allowed us to properly substantiate the grounds for initiating personal bankruptcy proceedings.
3. Secured the Opening of Personal Insolvency Proceedings
The commercial court reviewed our application and initiated insolvency proceedings concerning the client.
The opening of proceedings triggered several important legal consequences:
- the introduction of a moratorium on the satisfaction of creditors’ claims;
- the application of statutory restrictions on compulsory debt enforcement;
- the suspension of penalties and late-payment charges on claims covered by the moratorium;
- the transfer of creditor claims into the framework of the court-supervised insolvency procedure.
As a result, the client received legal protection against further uncontrolled debt enforcement, as provided by Ukrainian legislation.
4. Ensured Proper Consideration of Creditors’ Claims
Following the opening of insolvency proceedings, the required official announcement was published.
Creditors were given the opportunity to submit their monetary claims against the debtor in accordance with the procedure established by law.
The client’s creditors included:
- a banking institution;
- microfinance institutions;
- a factoring company.
However, none of the creditors submitted monetary claims to the court within the statutory deadline.
This circumstance played a decisive role in the subsequent proceedings.
5. Secured a Court Decision Recognizing the Debt as Discharged
Taking into account the circumstances of the case and the absence of submitted creditor claims, our team continued providing legal representation until the court proceedings were completed.
As a result, the court issued a decision under which the client’s debt of approximately UAH 300,000 was recognized as discharged.
This allowed the client to obtain lawful relief from the relevant credit obligations.
6. Secured the Removal of Bank Account Freezes and Property Seizures
Another important objective was to eliminate the restrictions preventing the client from accessing and managing his own funds.
Following the proceedings:
- the court issued a decision ordering the lifting of the seizures;
- the restrictions affecting the client’s bank accounts were addressed;
- property seizures associated with the relevant obligations were lifted;
- legal obstacles to the client’s ability to manage his assets were removed.
Result
- Approximately UAH 300,000 in credit debt was recognized as discharged
- The personal insolvency proceedings were successfully completed
- Bank account freezes were lifted
- Seizures of the client’s property were removed
- The client was released from the relevant credit obligations
- Legal conditions were established for restoring financial stability
The client received more than a court decision concerning debt discharge. He gained an opportunity to return to normal financial life without an overwhelming debt burden or frozen bank accounts.
Photographic Evidence of the Case Result
Key Takeaways from This Case
- Debts owed to multiple creditors can be resolved through personal bankruptcy
Having outstanding loans from banks, microfinance institutions, and factoring companies does not automatically prevent an individual from initiating personal insolvency proceedings.
The essential first step is to properly assess the debtor’s financial circumstances and determine whether the legal grounds for applying to the court are satisfied.
- Frozen bank accounts do not mean the situation is hopeless
If bank accounts have been frozen as a result of enforcement proceedings, it is important to examine the grounds for enforcement and identify lawful options for lifting the restrictions.
- Creditors’ actions can influence the outcome of insolvency proceedings
In this case, none of the creditors submitted their claims within the statutory deadline.
This circumstance played an important role in completing the proceedings and resolving the outstanding debt.
- Successful debt discharge requires thorough legal preparation
Proper preparation of documents, full disclosure of financial and property information, and compliance with the Code of Ukraine on Bankruptcy Procedures are essential for successfully completing personal insolvency proceedings.
Comprehensive Legal Support Helps Restore Financial Stability
Personal bankruptcy is a court-supervised legal procedure that, where statutory requirements are satisfied, can help individuals resolve overwhelming debt obligations.
However, the outcome depends on the specific circumstances of each case, the debtor’s good faith, the nature of the obligations, and compliance with procedural requirements.
This case demonstrates that even individuals facing debts owed to banks, microfinance institutions, and factoring companies may have a lawful way out of a financial crisis. Thanks to our team’s professional legal work, the client obtained relief from approximately UAH 300,000 in debt, secured the removal of bank account freezes and property seizures, and gained an opportunity to make a fresh financial start. If you are struggling with overwhelming loans or frozen bank accounts, complete the form below to request a legal assessment of your situation.
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