Credit restructuring during martial law

On February 24, 2022, martial law was introduced in Ukraine in connection with the armed aggression of the Russian Federation. This led to the fact that initially Ukrainian citizens received a credit holiday for a certain period, with the help of which they were not expected to accrue interest and fines for overdue obligations. However, the full-scale invasion of the Russian Federation into Ukraine has been going on for more than 1.5 years, and in connection with this, the legislation on crediting is constantly undergoing changes in accordance with the realities of today. In this article, we will talk about how to carry out credit restructuring during martial law in the state.

What changes have taken place in the legislation?

On June 10, 2023, the Law "On Amendments to Certain Laws of Ukraine Regarding the Peculiarities of Charging Interest on Consumer Credits During Martial Law and Improving State Regulation in the Field of Financial Services" entered into force. Now, when writing off interest on a loan, banks must be guided by its provisions.

For what purpose was this regulatory act adopted?

During the full-scale invasion of the Russian Federation into Ukraine, many citizens left their homes and permanent residences, but their credit obligations remained. And it was during the introduction of martial law in the country that financial institutions and financial institutions began to charge citizens for the use of consumer loans excessively high interest rates for the use of credit funds. This problem becomes especially relevant where hostilities are taking place in the country and in the territories temporarily occupied by the Russian Federation. And just as for every citizen of Ukraine, the calculation of fair interest for the use of credit is extremely important, since the level of security of individuals has significantly decreased compared to the introduction of martial law, so this NPA was created for the fair settlement of relations between the debtor and the creditor.

Yes, which loans are subject to restructuring?

During martial law in Ukraine and after 30 days have passed since its cancellation, the credit obligations of consumer credit debtors are subject to mandatory restructuring, in cases where the following conditions are met, namely:

• if the relationship is contractual on a consumer loan that was not secured by a pledge or mortgage;
• if the debtor has not received a relevant court decision regarding the collection of the last loan debt or there is an existing enforcement proceeding;
• if the actual place of residence of the debtor at the moment is the territory where hostilities are taking place, or if it is under occupation.

What criteria must the borrower meet for such a loan?

• from the moment ZU No. 3156-IX of June 10, 2023 enters into force and at the time the debtor applies to the financial institution with a request for debt restructuring, he must have an overdue monetary obligation to the creditor (there is no need to include cases in which the transfer of rights took place creditors to the guarantor);
• as of February 23, 2022, the debtor must not have an overdue monetary obligation, which the latter should have paid no later than February 23, 2022.

Thus, falling under these two criteria, the debtor has the right to apply to a financial institution with a demand for debt restructuring.

If you have a loan and want to restructure it during martial law, but do not know all the nuances of such a case, then in this case contact the Prykhodko and Partners law office. Our team always monitors all changes to legislation and clearly understands this topic, which helps us to solve similar situations. In addition, we have relevant experience in working with cases related to the restructuring of loans in banks, and therefore we know all the features of this procedure for the debtor.

Do not delay and come to us for a consultation!