Exemption from loan debts

Ukraine, as a country with a developed system of financial regulation, establishes clear and detailed rules and procedures related to the resolution of issues of exemption from debt obligations for loans. These rules certainly take into account the various aspects and factors that affect financial transactions between lenders and borrowers.

What should you pay attention to?

The terms of the agreement play an important role in determining how debt relief issues can be resolved. They may contain various sections, stipulated term conditions, as well as conditions regarding payments.

In addition, legislative aspects play a significant role in regulating this process. Laws that define the rights and obligations of creditors and borrowers, as well as bankruptcy procedures, can affect how debt issues are resolved.

In general, the system for solving issues of debt relief for loans is complex and takes into account various factors, including the type of loan, terms of the agreement and legal provisions. This helps ensure fair and effective mechanisms for resolving financial disputes between parties in credit relations.

Possible ways to get rid of debt

1. Debt restructuring

This is a legal process in an insolvency case used to reduce the amount of debt or change the repayment terms in accordance with the debtor’s debt restructuring plan.

Debt restructuring can look different, for example:

• The so-called credit “holiday” is a delay in payments for a certain time, when the borrower can suspend regular payments.
• The ability to repay the body of the loan itself – in this case, the borrower may be able to pay only the principal amount of the loan within a certain period of time, which allows to reduce the amount of accrued interest.
• Extending the term of the credit agreement itself means extending the term of the credit agreement, which can lead to a decrease in the monthly payment by spreading the amount of the debt over a longer period.
• Lowering the interest rate – this includes reducing the interest rate on the loan, which in turn reduces the monthly payments on the loan.

2. Sanitation

The reorganization plan precedes the opening of bankruptcy proceedings immediately before the commencement of the proceedings.

In this way, it is determined:

• the size, order and terms of repayment of the claims of only those creditors participating in the rehabilitation;
• procedures for implementation of the rehabilitation plan and supervision of its implementation;
• and, if a remediation manager is appointed, his authority.

It may additionally include the following:

• division into categories of creditors participating in rehabilitation, depending on the type of claims and whether there is security for them;
• establishing, depending on the requirements of different categories of creditors, the appropriate conditions for satisfaction;
• procedures for obtaining loans or credits;
• and other conditions stipulated by law.

3. Bankruptcy

This is a recognition by the court that the debtor is not able to restore his solvency using the procedures described above, and to repay the creditors’ claims in monetary form established by the law in a specified manner, in a way other than by means of the liquidation procedure or the procedure for repaying the debtor’s debts. However, it should be taken into account that such a procedure is considered quite complicated and requires the help of a qualified lawyer who is ready to help in solving this issue.

It is important to consider that each case may be unique, and the effectiveness of these methods may vary depending on specific circumstances. Therefore, the lawyers of the company “Prykhodko and Partners” are always ready to help you.