BANKRUPTCY OF PHYSICAL PERSONS ON THE NEW

April 18, 2019 in Ukraine institute of bankruptcy of individuals is introduced - the Code of Ukraine from bankruptcy procedures comes into force. Institute to regulate the judicial and pre-trial bankruptcy proceedings. The new law proposes a mechanism for the protection of an individual debtor from unscrupulous creditors. Now, having a debt, an individual is able to agree on the postponement or cancellation of the debt share, change the essential terms of his credit obligations, and get rid of the tax debt for the previous three years.

The debtor will receive the right to apply to the court with a statement on the opening of proceedings on his insolvency proceedings. The court may grant such a right to the debtor if there are the following grounds:

The amount of overdue obligations to the creditor (creditors) is not less than 30 minimum monthly wages;
The debtor has stopped repaying loans or making other scheduled payments in the amount of more than 50% of the monthly payments for each of the obligations within two months
The court issued a decree in the enforcement proceedings on the absence of an individual's property on which to enforce.
Together with the application, the debtor submits documents confirming the existence of the debt, the availability of property, accounts, a plan for the repayment of debt, information about income. The court assesses the documents submitted by the debtor, opens the insolvency proceedings and proposes the application of the debt restructuring procedure. The participation of an arbitration manager who provides professional assistance to the debtor in the development of the procedure and plan for debt restructuring within 120 days is mandatory in the consideration of the case. From now on, a moratorium on the satisfaction of creditors' claims comes into effect.

The restructuring plan is calculated in order to restore the debtor’s solvency, for example, the employment of the debtor or his retraining. Such a plan may include the cancellation of part of the debt, and the restructuring can not last more than five years. But, for some debtors, the procedure for restoring solvency can be up to 15 years - for foreign currency loans that are secured by an apartment or a residential building. The restructuring plan is necessarily approved by the lenders.

The court may discontinue the proceedings if, for example, the debtor reports false information about its property or income. In addition, the court may impose an arrest on property or accounts, restrict travel abroad.

If the court refuses to approve the debt restructuring plan, or if an individual violates the agreements reached, the creditor has the right to initiate the procedure for debt repayment in court. Under such conditions, the claims of creditors, which should be written off, are restored in full. Within 120 days, the debtor is declared bankrupt and the debt repayment procedure begins, during which they will sell the property of the debtor and satisfy the claims of creditors in the order established by order.

The property of the debtor is recognized all that is in his property, as well as what will be received by him in the future after his recognition of bankruptcy and before the completion of the procedure for repayment of debts. The exception is the property that is necessary to meet the immediate needs of the debtor or his family members and property, costing no more than 10 times the minimum wage. The law provides for the sale of bankruptcy property through ProZorro electronic public procurement system.

After completion of the procedure for the repayment of debts and the closure of the proceedings, the court makes a decision on the release of the debtor from debts, which from this moment are considered repaid. Within five years after the adoption of such a decision, no creditor can open insolvency proceedings for this individual. And this person, in turn, must inform the party at the conclusion of the loan, loan, pledge, surety, etc. agreement about the fact of its recognition as bankrupt.