How to write off a loan debt during martial law?

Today's urgent problem is the write-off of the loan debt in the conditions of martial law. After February 24, 2022, the majority of Ukrainians faced such problems as a decrease or late payment of wages, loss of a workplace, etc. That is, we are talking about objective reasons for non-fulfillment of obligations to banking institutions. It is important to remember that martial law does not provide exemption from the obligation to pay the loan debt. Financial organizations are interested in the timely return of loan funds.

Importantly:

According to modern Ukrainian legislation, during the period of martial law, citizens have the right to the implementation of preferential conditions for the payment of credit obligations.

How does the preferential loan write-off system work during martial law?

Preferential conditions for the fulfillment of credit obligations are provided for by Law No. 2120 "On Amendments to the Tax Code of Ukraine and other legislative acts of Ukraine regarding the effect of norms during the period of martial law" (entered into force on March 15, 2022). Among other things, the Law establishes that during the period of emergency, martial law and within 30 days after its cancellation/end, the borrower:

• He is released from the responsibility defined by Article 625 of this Code.
• For late loan payments, the borrower is released from the obligation to pay fines and interest.

At the same time, financial institutions do not have the right to increase the interest rate on the loan. Exception – the agreement of a possible change in the interest rate is reflected in the valid contract.

If the creditor violates the Law, that is, continues to charge fines against the debtor, his actions can be challenged in court. The most acceptable solution for the borrower will be to write off the debt.

Please note that preferential conditions also apply to military personnel. In accordance with Law No. 2011-XII "On the Social and Legal Protection of Servicemen and Members of Their Families", penalties, fines for late payment of debt obligations to banking institutions, as well as interest for the use of credit funds are not accrued. However, there are exceptions to every rule. If we are talking about the purchase of a car or real estate (house, apartment), credit obligations must be fulfilled in full.

What to do if there are no funds to pay the loan during martial law?

If there are no funds to pay the loan during martial law, one of the following options is possible:

• Appeal to the financial organization that granted the loan with a request for debt restructuring. In other words, to get a certain time for the gradual repayment of the loan.
• Declaration of bankruptcy for partial or full repayment of debt obligations. This option can be used in cases where the amount of debt is more than 30 times the minimum salary. The debtor must apply to the Commercial Court with an application to open the relevant proceedings.

The lawyers of "PRIKHODKO & PARTNERS" will help you to file bankruptcy for the possibility of full write-off of debt obligations. To do this, you need to take only one step - leave an application on our website. During the consultation, you will receive comprehensive information on the cost of filing bankruptcy and a detailed algorithm of actions. Sign up for a consultation and to calculate the price of debt cancellation for a loan during martial law by filing bankruptcy for an individual!