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Bankruptcy Removal of seizure from the debtor’s accounts

Kolesnyk Ilya

Attorney

E-mail

kolesnyk@prikhodko.com.ua

Phone numbers

Specialist in bankruptcy of individuals and legal entities. Provides legal support in bankruptcy procedures for individuals, private limited liability companies, legal entities, as well as closing executive proceedings, concluding restructuring and settlement agreements with financial institutions

Removal of seizure from the debtor’s accounts

Very often, situations arise when a person finds out about the seizure of accounts at the moment when he receives a message from the bank about the blocking of funds during an attempt to calculate or withdraw cash from the card. Seizure of the debtor’s accounts may be imposed on the basis of the final stage of the court proceedings. This is ensured by passing a decision on the seizure of funds that the debtor has in bank accounts.

After the seizure of the accounts, the debtor has no opportunity to use his own funds. For example, he will not be able to pay with a card in a supermarket or cafe, withdraw cash from an ATM, etc.

This is especially noticeable in relation to social accounts and accounts for the payment of wages, which as of today is strictly prohibited by law and judicial practice.

Important: seizure is imposed on accounts of any type: deposit, card, current. In addition, if one account is under arrest, the debtor will not be able to open a new one. All new accounts that the person wishes to open will be immediately blocked.

Seizure of accounts as part of court proceedings

Arrest is a separate stage of court proceedings aimed at collecting the debtor’s property. This is a set of measures that limit a person’s right to dispose of property. If there is no information about the property, the debtor must independently provide information about the funds that are in his bank accounts.

On the next working day after the receipt of the executive document, the executor issues a resolution on the opening of the relevant proceedings. This means that the debtor must submit a declaration of his own property and income. If we are talking about a decision of a non-property nature, it must be implemented within 10 working days.

Please note: funds held in special accounts are not subject to seizure in accordance with the procedure established by the Law of Ukraine “On Executive Proceedings” (Part Three of Article 52). Such accounts include: severance pay, pregnancy and childbirth benefits, treatment benefits, etc.

Algorithm for removing the seizure from the debtor’s accounts

If you received information about the seizure of accounts, there is no need to panic. The first step is to contact the bank representatives and clarify the reasons for blocking the account. If it is related to a private/public enforcement order, read its contents.

The second step is to contact the executor for a detailed review of the materials of the enforcement proceedings. In this way, you will be able to establish grounds for seizing funds.

The third step is to resolve the situation that has arisen. Possible actions include:

Payment of debt in accordance with the executive document.
Sending an application for cancellation of the imposed seizure.
Appealing the executor’s decision to impose a seizure.

Thus, for the implementation of the procedure of removing the seizure from the debtor’s accounts, there must be the following grounds:

Return to the court of the executive document regarding the seizure of accounts.
Completion of executive proceedings.
Satisfaction of the demands of all creditors.

If, after the return of the judicial enforcement document, it was established that it is not enforceable, the obligations placed on the debtor are terminated.

Some changes have been made as a result of martial law (from February 24, 2022). In accordance with the Law of Ukraine “On the Legal Regime of Martial Law” and additional orders of the Cabinet of Ministers of Ukraine, for the period of martial law on the territory of Ukraine:

Debtors – legal entities can withdraw or transfer funds from accounts that are under seizure in cases where it is about salary payments or mandatory state insurance.
Debtors – natural persons can use the accounts on which a seizure has been imposed, carrying out expenditure operations in cases where the amount of recovery according to the executive document does not exceed 100 thousand hryvnias.

If the arrest has not been removed from the debtor’s account, you should contact the bank with a request, submitting the relevant documents.

The National Bank has informed banks about the procedure for spending transactions from citizens’ accounts in the presence of a seizure of funds and calls on banks to take it into account when serving citizens. A banking institution in which an “arrested” account is opened, during martial law, is obliged to provide the client with the opportunity to use the funds in the account and not to take into account the decisions of state or private executors on the imposition of an arrest. In case of refusal of the banking institution to provide the possibility of spending transactions, the person has the right to appeal such actions to the National Bank of Ukraine.

All of the above actions to remove the seizure from the debtor’s accounts should be entrusted to professional lawyers. By contacting the experienced specialists of “PRIKHODKO & PARTNERS” for legal assistance, you can count on a positive solution to any situation. The key to our success is an individual approach to each client.

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1 question

Have you been placed under arrest on your quarters?

Yes

2 question

Do you have loan debts to a bank or MFI?

Yes

3 question

The amount of debt exceeds UAH 180,000?

Yes

Is it possible to go through the bankruptcy procedure if the debt is less than 180,000 UAH?

Bankruptcy can be filed regardless of the amount of debt — there are no minimum limits set by law. However, if the amount of debt is less than UAH 180,000, it is usually more advisable to agree on debt restructuring, as bankruptcy may be economically unprofitable.

If I am not in Kyiv, can I cooperate with you?

Yes, we work remotely throughout Ukraine and even with clients abroad! We have many clients from Lviv, Odessa, Dnipro, Kharkiv, Cherkasy and other settlements.

Communication is carried out in any way convenient for you.

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