Writing off credit debts of individuals in Ukraine

Credit debts of individuals are one of the urgent problems in the modern Ukrainian economy. This is manifested in the fact that citizens of Ukraine actively use the credit funds provided to them by the bank. However, there are often cases in life when a person is unable to make timely payments under the contract, and as a result, interest, fines, penalties, inflationary losses, etc. are charged to him. All this contributes to the active accumulation of debt. However, the question arises whether it is possible to write off such debts if a person has good reasons for delaying the debt? In this article, we will try to give an answer to this question and consider how credit debts of individuals are written off in Ukraine.

What is meant by the concept of debt write-off?

Debt write-off means that the debtor is released from the obligation to return the loan funds or pay the accumulated interest on the loan. This decision is made directly by the creditor and can take different forms. This is how partial repayment of a credit obligation and full repayment are distinguished.

Partial repayment means that the debtor will have to pay only part of the debt, and the rest of the amount is canceled by the institution that granted the loan. This can refer, for example, to interest, fees or a certain part of the principal amount of the loan (its body).

Full repayment of the debt means that the debtor is completely freed from the obligation to return the loan funds and pay interest, that is, not to make any further payments on the loan.

Under what conditions will the financial institution that issued the loan agree to write it off?

Usually, to write off the loan, the financial institution examines the overall solvency of the debtor to repay the loan. If positive dynamics are not observed and the debtor is in a difficult financial situation, a decision may be made to write off the credit debt. This is due to the fact that the collection of debt on a loan involves incurring significant monetary costs and time, and especially in the case of a small amount of debt, it may turn out to be less profitable to spend money on litigation than to simply write off the debt.

Among the most common reasons that can force a financial institution to write off debt on a loan are the following:

• permanent loss of working capacity (this can happen in case of an accident);
• a disease that prevents work (for example, cancer, heart failure, etc.);
• occurrence of a natural disaster or unforeseen circumstances (floods, earthquakes, hostilities, occupation, etc.);
• if the creditworthiness was calculated on the basis of the income of both spouses, and one of them died, then after his death, you can also apply for write-off of part of the debt, since the loss of one family member can lead to a significant reduction in income;
• expiration of the three-year statute of limitations on the loan;
• the person's lack of property with the help of which the creditor's demands can be satisfied.

Thus, in the case of the above-mentioned reasons for being in arrears on a loan, an individual has the right to apply to a financial institution to write off the debt. The bank will consider your application and make a decision on its satisfaction or rejection, depending on the circumstances.

If you need to write off a credit debt in Ukraine, contact the experts in your field - Prikhodko and Partners law firm. Our team is well acquainted with Ukrainian legislation and debt relief procedures, as it has many years of experience working with credit cases and insolvency of individuals. This, in turn, allows us to provide quality and effective legal assistance to our clients. Therefore, if you need professional advice from qualified lawyers and a debt write-off procedure, be sure to contact us!