Restructuring of foreign currency loans

Disputes between borrowers and banks over the issue of currency mortgages have not subsided in Ukraine for a long time. The vast majority of cases concern mortgage loans in foreign currency. After economic crises and a sharp drop in the hryvnia exchange rate, borrowers found themselves in a difficult situation, because their monthly payments increased many times. This led to massive defaults and threatened the stability of the banking system.

Therefore, the issue of restructuring foreign currency loans to ease the debt burden on the population has become acute. New approaches regulate the balance of interests of borrowers, banks and the state.

Restructuring foreign currency loans is a difficult but necessary step to solve the problem of foreign currency mortgages in Ukraine and restore the stability of the financial system.

Revolutionary measures of the authorities to solve the problem of foreign currency lending in Ukraine

At the end of April 2021, three revolutionary laws aimed at solving the acute problem of foreign currency loans in Ukraine entered into force.

• Law No. 1381 provides for debt restructuring for foreign currency loans taken before 2014 as collateral for housing. The debt will be repaid in hryvnia, and fines will be written off. Restructuring takes place at the request of the borrower. After that, the loan will be repaid in equal installments over 10-15 years with low interest.
• Law No. 1382 facilitates the bankruptcy procedure of individual borrowers, if the only creditor is the bank, and the only property is mortgaged housing.
• Law No. 1383 exempts from tax the debt forgiven by the bank to the borrower.

The main purpose of these laws is to protect borrowers of foreign currency mortgage loans who cannot repay them.

Legislative changes will ease their situation and solve the acute problem of foreign currency lending in Ukraine.

Challenges and opportunities of restructuring foreign currency mortgages in Ukraine

The currency mortgage problem has already caused significant losses to Ukrainian banks. Due to the long-term effect of the moratorium and the lack of motivation among borrowers to restructure such loans, they fell into the category of “non-performing”. Banks were forced to deduct reserves for such problematic loans, which limited their ability to issue new mortgage loans.

According to the current legislation, the restructuring of a foreign currency mortgage can take place through the bankruptcy procedure of the borrower or the conclusion of a settlement agreement under certain conditions. At the same time, the new amount of the debt is calculated based on the current market value of the mortgaged housing.

It is very important to balance the interests of the parties during restructuring. This function is performed by the court acting as an independent arbiter between the bank and the borrower. This approach makes it possible to carry out restructuring on the most balanced and fair terms for both parties.

Importantly! Despite the complexity, the restructuring of the foreign currency mortgage is the optimal way out of the current situation, provided that the interests of the participants in the process are balanced.

How to solve the problem with a foreign currency mortgage?

If you have difficulties paying off a foreign currency mortgage loan, do not give up. Contact the company “Prykhodko and Partners” for professional help. These are experienced lawyers who will help you find the best solution for your situation.

Here you can get:

• Consultations both online and in person with an expert on your foreign currency mortgage problem.
• Analysis of mortgage documents for compliance with current legislation.
• Legal support and representation of your interests during the court process.

The company will help you choose the best option for debt restructuring on a foreign currency mortgage. Experienced lawyers work here, solving similar issues every day. They will provide you with full support in solving the problem with a foreign currency mortgage.

Restructuring of foreign currency loans is a necessary step for solving the problem of foreign currency mortgages.