Write-off of accounts payable during the war

Debt write-off during the war is a topical issue, because in such a difficult time, Ukrainian citizens increasingly start using credit cards, but they cannot always pay off the debts incurred on them. This is due to unforeseen circumstances that may arise as a result of active hostilities in the country: loss of housing, due to rocket fire or temporary occupation of the territory of the state, sudden dismissal from work, forced relocation to another city or country, receiving serious injuries or the onset of health problems, etc. . All this contributes to the fact that Ukrainians are forced to take loans more and more often. And therefore, in this article, we will talk about how today it is possible to write off debt on a loan during the period of martial law in the country.

How to write off debt for a consumer loan during martial law?

On December 1, 2022, the Verkhovna Rada of Ukraine adopted Law of Ukraine No. 2823-IX, which provides for the write-off of loans for individuals for real estate and cars that were damaged or completely destroyed as a result of active hostilities in the state.

To do this, the borrower will need to apply to the creditor after the abolition of martial law in the country with a statement on the cancellation of debt under the credit agreement, which must meet the following criteria:

• the subject of such a contract should be either the purchase of real estate or a vehicle. If it is real estate, then it must be destroyed as a result of the military actions of the Russian Federation and should become the only place for the debtor's or mortgagor's family to live. If it is a vehicle, it must also be destroyed as a result of the military actions of the Russian Federation and be the only one in the debtor's family on February 23, 2022. The vehicle is considered destroyed if it is not subject to further repair or such repair is economically unreasonable;
• on February 23, 2022, the arrears under the credit agreement must not be overdue for more than 7 days;
• the purpose of obtaining a credit agreement is the purchase of real estate or a vehicle.

In addition, the debtor is also obliged to submit documents confirming the above-mentioned criteria together with the application for write-off of the loan debt.

What if you don't have any funds at all to pay off your accounts payable during a war?

In the event of such a difficult financial situation, you can act as follows:

• Ask a financial institution to restructure the loan. This means that the debtor applies to the bank with a statement in which he asks to reorganize his debt obligations under the credit agreement (postponement of payments for the principal amount of the loan and interest, change of the interest rate, cancellation of fines, etc.). Thus, the bank considers this application and makes a unilateral decision to carry out debt restructuring.
• Declaration of bankruptcy by an individual or legal entity. This is necessary in order to fully or partially repay the loan debt. To initiate the procedure, the debtor applies to the Commercial Court, where the latter opens proceedings on the case and begins its consideration. Its feature is that during the opening of the bankruptcy case, moratoriums apply to creditors' claims, which allows the debtor, at least for a while, to keep his property and try to restore his financial capacity with the help of pre-trial and judicial rehabilitation.

If you need to write off debt during the war in the country, then in this case you cannot do without experienced specialists - the Prykhodko and Partners law firm.

Our team will get to know your situation in detail and provide you with quality legal advice, as we have many years of experience in financial and banking law. So don't delay and ask for help!