Write-off of the loan under the bankruptcy procedure in Ukraine

In 2019, a new procedure came into force that allows individuals to write off their debts, namely the bankruptcy procedure in Ukraine. Bankruptcy is a measure of extreme necessity in the event that a person has a large debt to creditors. It will take from 3 to 6 months to pass, after which all debts, loans, fines and penalties are written off and, in the end, the person is freed from the debt burden. This procedure can be used by natural persons who are in arrears on each of the credit obligations for more than two months, as well as if debt repayment is really unaffordable according to your income.

How to start the bankruptcy procedure of an individual?

To begin with, it is necessary to collect all the necessary documents, which are specified in the Code of Ukraine on bankruptcy procedures. As soon as you have passed this stage and have all the documents in hand, you can proceed to the application itself. Of course, the application must be legally correctly drawn up with all the norms of the law, so we advise you to contact lawyers who will help with this.

After drawing up and submitting the application, the court performs a number of tasks, namely:

• Appoints a preparatory meeting;
• Opens proceedings on the case;
• Appoints the arbitration manager;
• Introduces a moratorium on meeting creditors' demands;

As soon as the procedure is completed, all the person's debts are automatically written off, and all open executive proceedings are terminated.

What debts are written off in the bankruptcy procedure?

Debtors who have applied for debt cancellation can count on full debt cancellation. However, there are exceptions, such as non-dischargeable debts, non-payment of alimony and disability compensation.

Are there consequences for a debtor who has gone through the bankruptcy procedure?

Despite the significant advantages, the bankruptcy procedure has a number of consequences that last for the time prescribed by law. After the debtor has been recognized as bankrupt within 5 years, a person cannot initiate bankruptcy proceedings at his request.

Also, negative consequences during bankruptcy affect business reputation and last for 3 years. In addition, within 5 years, a natural person recognized as bankrupt is obliged to notify other parties to such agreements of the fact of his insolvency before entering into loan agreements, suretyship agreements, pledge agreements and credit agreements.

What is the cost of the bankruptcy procedure?

The bankruptcy procedure is not free, but it is economically beneficial for the debtor, since, usually, the total value of the debt is much higher than the cost of the procedure. In order to open proceedings in a bankruptcy case, it is necessary to make an advance to the arbitration administrator, not the details of the Commercial Court, to which the application will be submitted. As of today, according to the Code of Bankruptcy Procedures, the remuneration of the restructuring manager is UAH 40,260. for three months of his work.

The bankruptcy procedure is a reliable way out of the debt hole. Every day it becomes more and more popular and there are more positive court practices and satisfied people.

If you have decided to put an end to your debts, but need help in more qualified support in this case, you can contact the lawyers of the company "Prykhodko and partners", who are always open to cooperation. To calculate the price of the bankruptcy procedure in Ukraine - leave a request in the form below!