Consultation on bankruptcy of an individual

The procedure for recognizing the bankruptcy of a natural person is rather complicated and unclear for people who do not have deep knowledge in the field of modern Ukrainian legislation. To resolve issues related to the recognition of bankruptcy, it is better to contact specialists in this field. Consulting on the bankruptcy of an individual is one of the activities of the lawyers of “PRIKHODKO & PARTNERS”.

Bankruptcy of individuals is a new area of modern Ukrainian legislation. This is a legal opportunity to get rid of your debt. Previously, only legal entities were declared bankrupt in Ukraine, while natural persons remained face to face not only with creditors, but also with collectors. With the help of the declaration of bankruptcy of an individual, the debtor has the opportunity to pay off existing credit obligations, thereby “rebooting” his financial life. Important: the bankruptcy procedure is not a financial indulgence. This procedure cannot be used in relation to unscrupulous debtors. We are talking about categories of debtors who:

• They are not ready to provide the arbitration administrator, the court, creditors with complete and true information about their own property status.
• After assuming the loan obligations, they alienated the property in favor of their relatives.

Thus, the insolvency procedure can be used exclusively by a natural person-debtor who, due to certain life circumstances, cannot fulfill his debt obligations.

Algorithm for recognition of bankruptcy of an individual

Bankruptcy of individuals may be initiated under the following conditions:

• The amount of the debt is 30 or more minimum wages.
• An individual has no property that can be alienated.
• The debtor does not fulfill credit obligations for more than 2 months.
• There are other circumstances that confirm the debtor’s insolvency.

The first stage for declaring bankruptcy is submitting an application and a package of documents to the commercial court at the debtor’s place of registration (residence).

If the court makes a decision to initiate proceedings in the case of insolvency of a citizen.

The second stage begins – the appointment of the arbitration manager. The official, together with the debtor, is engaged in the development of a debt restructuring plan. A natural person can count on the deduction of 120 days, during which a ban on payment of payments is imposed (the exception is mandatory payments, for example, payment of alimony). Also, by a separate decision, the court can seize the debtor’s property. Creditors send their demands to the debtor within 30 days. If it is not possible to implement the restructuring plan or it has not been approved by the court, the insolvency of the natural person is recognized.

The third stage is the beginning of the procedure for repaying loans and other debts. If the debtor has no funds, the sale of the property, which is privately owned by the bankrupt, is initiated.

Limitation of the rights of a bankrupt natural person

Along with the above benefits for an individual in the event of an insolvency proceeding, there are certain financial obstacles. For example, an individual debtor must pay for the services of an arbitration manager.

In addition, individual debtors may be prohibited from leaving Ukraine. Such a decision is taken by the commercial court on its own initiative or at the request of the arbitration manager.

This especially applies to cases where the debtor prevents the procedures provided for by the Bankruptcy Code.

Advantages of declaring bankruptcy in Ukraine

Among the main advantages of declaring bankruptcy of an individual:

• Moratorium on satisfaction of creditors’ demands.
• The possibility of consideration of all debts in one proceeding.
• Cessation of taxes and interest on loans.
• The possibility of forgiveness, write-off of debts.
• Suspension of executive actions for the period of consideration of the bankruptcy case.

Also, recognition of bankruptcy for an individual is an opportunity to start financial life with a clean slate.

Lawyers of “PRIKHODKO & PARTNERS” have practical experience of working with cases related to recognition of bankruptcy of individuals. We will be able to choose the best option for the insolvency procedure for you. Also, the specialists of our legal company provide support for the bankruptcy procedure of individuals, taking into account all the nuances and minimizing possible risks.