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Publication date: 07.11.2024
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Loan debt is the amount of money that the borrower (individual or legal entity) undertakes to return to the creditor (bank or financial institution) together with interest for the use of loan funds. The debt consists of the principal amount of the debt - this is the amount that the borrower received on credit and must return, and interest on the loan - this is the fee for using credit funds, calculated in accordance with the interest rate specified in the contract.
Loan debt can accumulate in cases where the borrower does not make timely payments, which can lead to the accrual of fines and interest. Failure to pay a debt can also have legal consequences, including referral to a court or enforcement agency for enforcement.
Question
Is it possible to reduce loan debt for military personnel in Ukraine?
Answer
So, for military servicemen in Ukraine, it is possible to reduce the loan debt or provide preferential conditions, since they are covered by certain legal and social support.
For military personnel in Ukraine, there are certain mechanisms that allow you to reduce the debt load or get a deferment on loans.
The main options available to servicemen to reduce credit debt:
- Deferred payments: According to Ukrainian law, military personnel who are in a combat zone or performing military service are entitled to credit holidays or deferred payments. Banks are obliged to provide such deferment without charging fines and penalties for the period of service.
- Debt restructuring: In the event of financial difficulties, military personnel can apply to the bank with a request to restructure the loan. This may include reducing monthly payments, changing the loan term, or even temporarily lowering the interest rate.
- Interest or part of the debt write-off: Some banks, as part of social support, provide military personnel with the opportunity to write off interest or a certain part of the loan. This is usually discussed individually with the bank.
- Credit holidays by law: Ukrainian law stipulates that during martial law and for the period of service, military personnel may not pay the principal amount of the debt. However, it is worth clarifying the conditions with a specific bank, as banks have their own procedures and rules that may vary.
- Legislative programs for the protection of military personnel: In conditions of martial law, there are protection programs at the legislative level that provide for the suspension or change of the terms of credit obligations for military personnel. Military personnel should contact the bank or seek legal advice to know their exact rights.
It is also possible to try to reduce the debt on a loan for military personnel through the court if pre-trial methods of resolving the situation have not worked, but for this it is necessary to have good grounds, for example, recognizing the situation that the debtor is a military person, as well as taking into account the influence of circumstances related to his service.
The process may include several stages:
- Petition for Debt Reduction or Debt Restructuring: Members of the military can apply to the courts for debt relief due to service-related hardships. In court, you can ask for credit restructuring or change of loan terms due to impossibility of making full payments due to mobilization or being on duty in a combat zone or worsening financial situation due to being in the army.
- Application of the law on the protection of the rights of servicemen: servicemen who are on duty in a combat zone or mobilized during martial law can ask the court to apply the provisions on the protection of their rights, in particular in terms of the suspension of fines and penalties for the period of service.
- Restructuring the debt through the court: if the bank refuses to change the terms of the loan or give preferential conditions to the serviceman, you can apply to the court with a request to restructure the debt.
- The court can make a decision to change the terms of the loan: extending the term of the loan, reducing the amount of monthly payments, or even partially writing off the debt.
- Application of rules on martial law: during the period of martial law, credit organizations are obliged to take into account the status of military personnel, who should not be subject to fines or penalties. The court can confirm this in case of disputes with banks about charging additional costs.
- Appeal process: If a service member already has debt that has caused legal proceedings, an attorney can apply to the court to reduce the amount owed. The court may recognize the right of a serviceman to receive benefits or reduce debt as a result of force majeure circumstances related to his service.
- Ban on debt collection: the court will confirm that the serviceman was in a combat zone or could not fulfill financial obligations for other reasons, a temporary suspension of debt collection is possible. Subsequently, the court may decide on restructuring or writing off part of the debt.
Advantages of applying to court for this purpose:
Legal justification for the protection of rights: after applying to the court, it is possible to achieve the application of provisions that allow the protection of the rights of a serviceman during the performance of his duties.
Legalization of benefits: official confirmation of rights to benefits or debt reduction can be obtained through the court.
Revision of the terms of the contract: it is possible to prove in court that the provision of preferential terms is expedient to solve the financial problems of a serviceman.
Hiring an experienced military lawyer will help you understand the legal nuances, prepare the necessary documents and competently represent the interests of the serviceman in court. To obtain legal support and services of a military lawyer in matters of debt reduction or to prepare documents, it is better to contact a military lawyer or a lawyer who will help defend the rights of a serviceman in negotiations with banks or financial institutions.
The services of a military lawyer to solve the issue of debt reduction on a loan for military personnel of the legal marketplace "Consultant" can be extremely useful, because the lawyer helps to correctly prepare the necessary documents, submit the appropriate statements to the court and ensure proper representation in court.
