Reform impulse or step back. Verkhovna Rada of Ukraine adopted the Code of bankruptcy proceedings

Verkhovna Rada of Ukraine on October 18, 2018, in the second reading adopted the Code of Bankruptcy Procedures (hereinafter - the Code). The Code enters into force and enters into force six months from the date of its official publication, with the exception of provisions that define the creation of an electronic trading system and authorization of electronic platforms, which enter into force and are effective three months after the date of official publication of this Code .

The Code was adopted to replace the outdated Law “On Restoring Debtor’s Solvency or Declaring It Bankrupt”, which is now governed by bankruptcy procedures.

From the date of entry into force of this Code, further consideration of bankruptcy cases will be carried out in accordance with its provisions, regardless of the date of commencement of bankruptcy proceedings, except for bankruptcy cases, which were in the process of reorganization at the time this Code entered into force. Proceedings in these cases will continue in accordance with the Law of Ukraine “On Restoring Debtor’s Solvency or Declaring It Bankrupt”. The transition to the next judicial procedure and further proceeding in these cases will be carried out in accordance with this Code.

This Code establishes the conditions and procedure for restoring the solvency of a debtor-legal entity or declaring it bankrupt in order to meet the claims of creditors, as well as restoring the solvency of an individual. Its goal is to increase the efficiency of bankruptcy procedures, the level of protection of creditors' rights, improve the procedure for selling the debtor’s property at auction, increase the level of implementation of contracts and court decisions, regulate relations to restore the solvency of individuals in difficult financial situations and need assistance from the state. The most significant change is the ability to recognize bankrupt individuals. Previously, this legislation did not provide.

It is worth noting that cases of bankruptcy of individuals will be considered by economic courts, as is the case with legal entities, necessarily with the participation of the arbitration manager. There will also be two procedures - judicial and pre-trial.

In court, it will be possible to agree on debt restructuring or satisfaction of the creditor’s claims. At the same time, they are not subject to restructuring and writing off debts on loans taken by the debtor for recreation, entertainment, purchase of luxury goods, as well as debts arising from participation in gambling.

In developed countries, there has long been a procedure for restoring solvency and bankruptcy of individuals. In Ukraine, if there is an executive document recognizing a debt for an individual, this debt is recorded for it until the full repayment, even in the absence of property owned by the debtor on the right of private or joint ownership.

From now on, individuals and debtors and their creditors have the opportunity to settle the issue of debts - through mechanisms for attracting arbitration managers.

Due to the new Code, the bankruptcy procedure provides people with new opportunities to restore their solvency - to pay off the debts that they can pay, and write off by the court’s decision those debts that people, for objective reasons, are not able to pay.

However, not all debtors in financial difficulties can count on an easy solution. The Bankruptcy Code provides that they are not exempt from debts associated with alimony and payments of harm caused to life and health.

The result of debt relief is the impossibility for 5 years to take new loans and credits, enter into contracts of guarantee, conduct entrepreneurial activities in the form of an emergency, engage in certain types of professional activity - law, notary and bailiffs.

Regarding the initiation of a bankruptcy procedure of an individual, it should be noted that such a procedure is possible only at the request of the individual who is the debtor. That is, the creditor, as in the case of a debtor with a legal entity, will not be able to initiate the relevant process. It is also impossible to repay the debt to take away the only housing of the debtor, if it is an apartment of 60 square meters or a private house of 120 square meters.

To protect the interests of creditors, it is worth noting that if during the bankruptcy procedure there is a defaulting debtor and concealment of his income, he will be denied written off of the debt.

It is also necessary to pay attention to the problem of mortgage debt.

Today in Ukraine on the balance sheets of banks that are liquidated, there are about 40,000 mortgage loans totaling 68 billion hryvnia. Only about 3% of them are paid by borrowers (of those that stopped paying loans even before bank failures, because the overwhelming majority of mortgage loans were issued in US dollars at the rate of 5 UAH / $).

After the entry into force of this Code, the Law of Ukraine “On the Moratorium on the Recovery of the Property of Ukrainian Citizens, Provided as Security for Credits in Foreign Currency,” will also lose its force. Now the debtors who took out mortgage loans will have two ways to solve the debt issue. The first is when the debtor initiates a bankruptcy procedure and sells mortgage property at auction. Funds received from the sale of property, sent to the bank, the balance of the debt is repaid. The second, through the mechanism of a settlement agreement or the restructuring of a currency mortgage, is spelled out in the Final Provisions specifically for those citizens who took out a loan for housing, in which they currently live. The use of such a mechanism is permitted within 5 years from the moment the Code enters into force.

The mechanism provides that the appraiser, selected by the lender, determines the market value of housing. In this case, the assessment occurs exclusively in the national currency. Further, this amount is adjusted for the amount of the loan body already paid, and thus the new amount of debt is calculated. Then the payment term and interest are calculated. For housing of less than 60 square meters, it is allowed to pay arrears of 5 years at an annual rate, 1 percentage point more than the average for the banking system. For housing with an area of ​​more than 60 square meters - 10 years at a rate higher than the average bank by 3 percentage points. Only at 100% repayment of the restructured debt for the specified 10-15 years the debtor is released from the remaining obligations - penalties and fines, which were formed for the delay in the mandatory monthly payments.