How is it legal not to pay a loan in Ukraine? – Write-off of loans through the bankruptcy procedure

Repayment of the loan is an important part of the financial plan of everyone who undertakes obligations to the creditor. But sometimes life circumstances can cause a person to not be able to pay his loan on time. If you find yourself in such a situation, the most important thing is not to panic and not to make hasty decisions.

What are the negative consequences for the debtor if he avoids paying the loan?

One of the worst options is trying to avoid paying the loan.

• Penalties: banks can charge penalties for late loan payments, as well as for non-payment at all.
• Deterioration of the credit history: insolvency on the loan leads to the deterioration of the credit history of the debtor. If the debtor does not pay the loan, this will lead to a negative entry in his credit history, which will make it difficult to obtain loans in the future.
• Loss of property: in case of non-payment of the loan, the bank has the right to apply to the court with a claim to restore the bank's rights to the pledged property. If the court approves the bank's claim, the property must be sold at auction, and the proceeds used to cover the debt.
• Court proceedings: in case of non-payment of the loan, the bank is forced to go to court with a claim against the debtor. If the court decides to give a decision in favor of the bank, the debtor is obliged to pay the debt and fines. In the event of the debtor's insolvency, the court imposes sanctions on him, such as the seizure of property, a ban on leaving the country, and others.

What are the ways to avoid problems with creditors?

• If you have difficulties in paying the loan, the first step should be to contact the creditor. They are usually willing to help you by offering different options to solve the problem, such as debt restructuring or temporary reduction in payments.
• If you need to save funds to pay the loan, then postpone other expenses that are not very important.

How to legally and effectively avoid loan payments?

If you need to find a legal way not to pay the loan, then you should consider bankruptcy.

Bankruptcy proceedings can be used as a way to protect your rights and interests, but only if all the necessary rules are followed.

What to do to file for bankruptcy?

The bankruptcy procedure in Ukraine involves submitting a bankruptcy petition to the court on behalf of the debtor. According to the legislation of Ukraine, the application must contain complete information about the debt, the state of the debtor's financial affairs and assets. After filing, the court will review your situation and make a bankruptcy decision.

If the court declares you bankrupt, a rehabilitation or liquidation procedure will be ordered in your favor. Sanitation is the process of restoring the debtor's financial condition through debt restructuring and other measures. Liquidation is the process of selling the debtor's assets for the purpose of returning funds to creditors.