How to declare yourself bankrupt before a bank in Ukraine?

Bankruptcy is the last resort for a person who cannot repay their debts due to a difficult life situation, such as a serious illness, job loss, disability or even the death of a loved one. This legal procedure allows you to get rid of debts, but it is accompanied by responsibility before the court and creditors. If a person has the means to repay their debts, bankruptcy is not an appropriate option.

What is the jurisdiction of bankruptcy cases?

Bankruptcy cases of individuals are considered by commercial courts at the debtor's place of registration or residence. A change of the address of the debtor after filing the application does not affect the territorial jurisdiction of the court. In the absence of jurisdiction in a competent court, the case is transferred to the appropriate court in accordance with the established rules, which are defined by legislation, ensuring competent consideration of the issue of bankruptcy of a natural person.

Who can apply for bankruptcy?

Debtors who have overdue debts to creditors for more than 2 months have the right to apply to the commercial court for consideration of the bankruptcy case. Additional grounds for this are specified in Part 2 of Article 115 of the Code of Ukraine on Bankruptcy Procedures.

After determining the existence of grounds, the debtor submits an application to open a case and at the same time provides the necessary package of documents in accordance with the requirements of Article 116 of the Code. This may contain powers of attorney, evidence and other documents that affect the consideration of the case and decision-making on it.

There are two stages in the bankruptcy procedure for an individual:

1. Debt restructuring: This is the best option for resolving a bankruptcy case. A person, having admitted his insolvency, submits a debt restructuring plan to the court. If the creditors do not object, the parties within 120 days submit a plan for approval to the commercial court, where new terms of debt repayment are determined that correspond to the debtor's financial capabilities.
2. Declaring the debtor bankrupt and forced repayment of debts: If restructuring is not possible or does not receive support from creditors, the procedure for declaring the debtor bankrupt is introduced. Together with the person managing the sale of the property, an inventory of the debtor's property is made, and its value is included in the liquid mass for repayment of debts to creditors.

Bankruptcy of an individual has its advantages and disadvantages.

Advantages include:

• debt restructuring and the possibility of selling property to repay the debt;
• automatic introduction of a moratorium on creditors' claims and the removal of seizures from property and bank accounts;
• stopping the growth of debt and canceling fines;
• full write-off of debts in case of no property or no claims by creditors.

Disadvantages include:

• restrictions on concluding financial agreements related to loans or credits;
• the obligation to notify other parties of their insolvency;
• possible loss of some business reputation for a certain period after the debtor is declared bankrupt;
• limitation in initiating a new bankruptcy process within five years after the completion of the previous case.

In case of misunderstanding, or in need of legal assistance regarding the preparation of the required package of documents, the lawyers of the Prykhodko and Partners law firm will help you. Get in touch now and get feedback that will help you overcome this issue.