Legal cancellation of personal debts. persons before the bank due to bankruptcy

Loans are a great way to additionally finance your life needs: buying real estate, purchasing a plot of land or household appliances, business development, etc. However, in the life of every citizen, there may come a period when the deadline for mandatory payments has already arrived, but the person cannot repay them due to existing insolvency due to various circumstances. As a result, all this leads to an increase in debt to a financial institution or MFI. A completely logical question arises, is it possible to write off debts in such a case? This shows the relevance of the chosen topic. Therefore, in this article, we will provide an answer to the question of how it is possible to legally write off the debts of an individual to the bank due to bankruptcy.

What are the most common causes of personal insolvency?

• Sudden loss of work as the main source of income;
• A significant increase in the number of received loans;
• Lack of planning and irrational spending of credit funds;
• Economic crisis in the country, occurrence of force majeure or force majeure;
• The presence of a serious illness that makes it impossible to perform one's work function.

Of course, the above list is incomplete, as there may be other reasons for insolvency, depending on the life situation of each citizen.

How can you legally discharge personal bankruptcy debts in 2023?

First of all, the debtor (individual) needs to start bankruptcy proceedings. For this, a citizen applies to the judicial authorities with a statement and the following list of documents:

• if the application is not submitted personally by the debtor, but through his representative, then the court must provide a power of attorney certifying his authority;
• documentation from which it can be seen that the debtor has no FOP status;
• a list of creditors with a mandatory indication of their total amount of monetary claims against the debtor;
• copies of documents showing the property owned by the debtor on the right of ownership, with a mandatory indication of its location and storage;
• documentation that shows the transactions that the debtor committed during the year before the filing of the application for insolvency;
• information about the debtor's open accounts in all financial institutions both in Ukraine and on the territory of other states;
• if there is an employment book, then its copy;
• information about the debtor's employers;
• declaration of property status;
• documents showing the absence of a criminal record for any economic crimes;
• other documentation that can confirm the existence of legal grounds for bankruptcy proceedings.

In addition, in addition to the application, the debtor must also submit a plan for restructuring his debts, which may contain the following information:

• sale of a certain part of the debtor's property;
• a change in the methods of fulfilling the obligation due to the postponement of mandatory payments, deferment of the amount of payments, full or partial forgiveness of the debt by the creditor;
• receipt of guarantees by the financial institution regarding the fulfillment of the debtor's obligation by third parties, etc.

After submitting the entire package of documents, the court examines them in detail and makes a decision to open proceedings in the case. From this moment on, the moratorium on meeting the demands of creditors begins, the amount of the debt becomes fixed, and the accrual of other penalties under the contract ceases.

After the court recognizes an individual (debtor) as bankrupt, the latter can count on full or partial write-off of his debt obligations to creditors.

Do you need to legally discharge your debts through bankruptcy? In this case, be sure to contact the "Prikhodko and Partners" law office. Our lawyers will provide you with high-quality legal advice and legal assistance, as we have considerable experience in dealing with similar cases of debt relief through bankruptcy proceedings. Get in touch!