Support of the bankruptcy procedure of an individual

When It Is Appropriate to File for Individual Bankruptcy

It is advisable to request a preliminary assessment if:

• you have accumulated overdue debts to banks or microfinance organizations;
• you are no longer able to maintain your current payment schedule;
• enforcement proceedings have been opened;
• bank accounts have been frozen;
• your income is insufficient to service your debts;
• you have several creditors;
• there is a risk of compulsory enforcement against your property;
• you need to assess the possibility of debt restructuring or bankruptcy.

Bankruptcy is defined by the Code as the debtor’s inability, recognized by the commercial court, to restore solvency and satisfy established creditors’ claims otherwise than through the procedure provided by law. For individuals, debt restructuring and debt repayment procedures are applied. ([Legislation of Ukraine](https://zakon.rada.gov.ua/laws/term/2597-19?utm_source=chatgpt.com “Кодекс України з процедур … | від 18.10.2018 № 2597-VIII (Терміни в документі) // Термінологія законодавства”))

Before filing an application, it is important not only to determine the amount of debt, but also to review property, income, enforcement proceedings, and other financial circumstances of the debtor.

Preliminary Analysis Before Filing the Application

The lawyer reviews:

• the total amount and structure of the debt;
• the number of creditors;
• loan agreements;
• enforcement proceedings;
• seizures of accounts and property;
• the debtor’s income;
• real estate, vehicles, and other property;
• the existence of mortgages or pledges;
• financial transactions;
• other circumstances that may be relevant to the case.

The completeness of the information is fundamentally important. In insolvency proceedings, the debtor’s financial situation is analyzed comprehensively, so concealing assets or material information may create additional legal risks.

Benefits of Working with Prikhodko & Partners

We help:

• check whether there are grounds for the procedure of insolvency;
• analyze debts, property, and income;
• prepare the application to the commercial court;
• compile the complete set of documents;
• verify financial information before filing;
• represent the client’s interests in court;
• support cooperation with the restructuring manager;
• work with creditors’ claims;
• support debt restructuring or repayment.

What Is Included in an Individual Bankruptcy Application

The case must correctly reflect:

• information about the debtor;
• the list of creditors;
• the amount and legal basis of the debt;
• information about income;
• information about property;
• information about bank accounts;
• information about enforcement proceedings;
• information about pledged and mortgaged property;
• other financial circumstances required by law.

That is why it is dangerous to use a ready-made application template without analyzing the documents. A debtor with several consumer loans and a person who owns real estate, has a mortgage, enforcement proceedings, and several creditors require different preparation of the case.

Documents Required to File an Individual Bankruptcy Application

The following may be required:

• identity documents;
• loan agreements;
• certificates and debt calculations;
• information about creditors;
• enforcement proceeding documents;
• information about income;
• documents for real estate;
• documents for vehicles;
• information about bank accounts;
• mortgage and pledge documents;
• information about financial obligations;
• other documents depending on the circumstances of the specific case.

Before filing the application, the lawyer prepares a list of missing documents and checks whether the financial data is consistent.

Opening Insolvency Proceedings

First, the court reviews the application and decides whether to open insolvency proceedings. Filing the application itself does not mean that the person is automatically declared bankrupt or that debts are immediately written off. After the case is opened, the procedure provided by the Code applies, with debt restructuring playing an important role.

Debt Restructuring for an Individual

Debt restructuring is a court procedure aimed at restoring the debtor’s solvency by changing the method and order of fulfilling obligations in accordance with a restructuring plan. ([Legislation of Ukraine](https://zakon.rada.gov.ua/laws/term/2597-19?utm_source=chatgpt.com “Кодекс України з процедур … | від 18.10.2018 № 2597-VIII (Терміни в документі) // Термінологія законодавства”)) At this stage, the following are analyzed:

• the debtor’s actual income;
• the amount of monthly obligations;
• the structure of the debt;
• the debtor’s property status;
• creditors’ claims;
• the possibility of complying with the future plan;
• other circumstances affecting solvency.

The result should not be a formal scheme, but a realistic model for fulfilling obligations if the debtor’s financial condition allows it.

Who Is the Restructuring Manager?

The Code separately defines:

• the restructuring manager — an insolvency practitioner appointed by the commercial court to conduct the debt restructuring procedure of an individual;
• the realization manager — an insolvency practitioner who performs the functions provided by law in the debt repayment procedure.

These definitions are expressly contained in the Bankruptcy Procedures Code of Ukraine. ([Legislation of Ukraine](https://zakon.rada.gov.ua/laws/term/2597-19?utm_source=chatgpt.com “Кодекс України з процедур … | від 18.10.2018 № 2597-VIII (Терміни в документі) // Термінологія законодавства”)) The insolvency practitioner is not the debtor’s personal lawyer. They have an independent procedural status and perform functions defined by law. That is why the debtor’s lawyer continues to represent the client’s interests, analyze procedural actions, and help protect the client’s legal position.

Debt Restructuring Plan

Restructuring may provide for changes to the method and order of fulfilling obligations in accordance with the approved plan. When preparing the plan, the following are taken into account:

• the debtor’s income;
• necessary expenses;
• the total amount of debt;
• the number of creditors;
• repayment periods;
• the debtor’s property status;
• the realistic ability to comply with the new payment schedule.

The result should not be a formal scheme, but a realistic model for fulfilling obligations if the debtor’s financial situation allows it.

Debt Repayment After an Individual Is Declared Bankrupt

After an individual is declared bankrupt, the debt repayment procedure applies. The Code defines it as a court procedure used to satisfy creditors’ claims through the sale of the property of a debtor who has been declared bankrupt. ([Legislation of Ukraine](https://zakon.rada.gov.ua/laws/term/2597-19?utm_source=chatgpt.com “Кодекс України з процедур … | від 18.10.2018 № 2597-VIII (Терміни в документі) // Термінологія законодавства”)) Therefore, the old wording “liquidation of an individual” is incorrect. A person as a legal subject is not liquidated — the procedure concerns repayment of debts.

Can Debts Be Written Off Through Bankruptcy?

The procedure may indeed result in the debtor being released from part of the unpaid obligations in accordance with the rules of the Code, but this does not mean automatic cancellation of any debt immediately after the application is filed. Before that, the following stages take place:

1. Review of the application by the court.
2. Opening of proceedings.
3. Work with creditors’ claims.
4. Debt restructuring procedure.
5. Assessment of property and financial condition.
6. If there are legal grounds — declaration of the debtor as bankrupt.
7. Debt repayment procedure.
8. Adoption of the relevant court decisions.

In addition, the law provides for obligations subject to special rules, so the possibility of discharge must be assessed separately for each category of debt.

Bankruptcy is not an application for automatic cancellation of loans, but a full court procedure involving an analysis of debts, property, income, and creditors’ claims.

Stages of Cooperation with a Lawyer

The lawyer helps:

1. Conduct an initial analysis. Debts, income, property, and enforcement proceedings are reviewed.
2. Assess the prospects of the procedure. The legal grounds and possible risks are evaluated.
3. Collect the documents. A complete package of financial and procedural materials is prepared.
4. Prepare the application. The documents are prepared for filing with the commercial court.
5. Represent the client’s interests. The lawyer supports the court proceedings.
6. Support restructuring. The lawyer helps protect the client’s position when working with creditors and the restructuring manager.
7. Support the further procedure. If necessary, legal assistance is provided during the debt repayment stage.

Cost of Preparing an Individual Bankruptcy Application

The price is affected by:

• the number of creditors;
• the number of credit obligations;
• the total amount of debt;
• the existence of enforcement proceedings;
• the existence of seizures;
• the debtor’s property;
• the existence of a mortgage or pledge;
• the volume of financial documents;
• the complexity of preparing the application;
• the required scope of court representation.

In some cases, the client needs only a preliminary consultation and assessment of prospects. In others, full legal support is required from preparation of the application through completion of the court procedure.

Common Situations When Filing an Individual Bankruptcy Application

Conclusion

An individual bankruptcy application is the beginning of a full insolvency court procedure, not a way to automatically cancel loans. Before applying to the commercial court, it is necessary to verify the grounds for the procedure and collect information about debts, creditors, income, property, and enforcement proceedings. After the case is opened, debt restructuring is the primary mechanism, and if the conditions established by law are met, the procedure may proceed to declaration of the debtor as bankrupt and debt repayment.

Unable to cope with loans and enforcement proceedings? Submit a request on the Prikhodko & Partners Law Firm website. A lawyer will analyze your debts, property, and documents and help prepare an insolvency application.