Publication date: 16.07.2025
A specialist in bankruptcy of individuals and legal entities, provides support in bankruptcy procedures on the part of debtors or creditors, support in concluding restructuring/settlement agreements with creditors, closure of executive proceedings, debt collection for housing and other services.
Input Data:
In December 2024, a client, Ruslan, approached the law firm, facing an unexpected and extremely unpleasant problem – a lawsuit for debt collection from LLC "Business Loan." Ruslan's situation was particularly complex because a personal insolvency case had already been opened against him in October 2023 at the Commercial Court of Chernihiv Region (case № 911/2659/23). Within this case, a debt restructuring procedure was introduced, which provides for a special procedure for asserting and repaying creditor claims.
According to the Code of Ukraine on Bankruptcy Procedures, creditors who have not asserted their monetary claims within the legally established period within the insolvency case are considered to have had their claims satisfied. Despite this, on November 27, 2024, LLC "Business Loan" obtained a default judgment from the court for the collection of a significant sum from Ruslan: 95,362.44 UAH of principal debt and 2,422.40 UAH of court fees. Such a default judgment, issued without the full participation of the defendant, created a direct threat of compulsory debt collection, despite the client's existing bankruptcy status and the rules governing the satisfaction of creditor claims in such cases. The problem lay in the creditor's unscrupulous actions and the need for urgent cancellation of an unjust court decision.
Problem:
Analysis of the situation revealed a critical violation on the part of LLC "Business Loan." A key point was that the plaintiff, being reliably informed about the client's open insolvency case (which is public information and registered), deliberately failed to assert its monetary claims within the legally established period within this procedure. This indicated:
- Unscrupulous circumvention of the bankruptcy procedure mechanism: Instead of acting according to the Code of Ukraine on Bankruptcy Procedures and asserting its claims within the established period in the insolvency case, LLC "Business Loan" chose to obtain a default judgment in the general procedure, attempting to bypass the special bankruptcy rules.
- Violation of the norms of the Code of Ukraine on Bankruptcy Procedures: According to the provisions of this Code, creditor claims that were not asserted within the established period after the opening of the insolvency case are considered satisfied. Therefore, Ruslan's debt to LLC "Business Loan" should have already been considered satisfied by law.
- Illegality of the default judgment: Obtaining a default judgment under such circumstances was unlawful, as the claims were effectively based on already extinguished debt, and the defendant's rights to defense were violated.
Thus, LLC "Business Loan"'s actions were aimed at obtaining collection of funds to which they had already lost the right, by abusing procedural opportunities and trying to bypass special bankruptcy legislation.
Desired Outcome:
Cancellation of the default judgment and full refusal to satisfy LLC "Business Loan"'s claim due to the debt's extinguishment under the Code of Ukraine on Bankruptcy Procedures.
Solution:
The lawyer developed a comprehensive and multi-layered legal strategy aimed at fully protecting the client Ruslan's financial interests and restoring legality. The work included several key stages:
- Preparation of documents for canceling the default judgment.
The first and most important step was the prompt preparation and submission to the court of an application for review of the default judgment. This procedural document contained a detailed analysis of the case circumstances and legal justification for why the default judgment should be canceled. Simultaneously, a response to the claim and other necessary procedural documents were prepared for further substantive consideration of the case. - Active representation of interests in court.
The lawyer from the law firm ensured full and qualified representation of client Ruslan's interests in all court hearings. He actively presented the legal position, provided explanations to the court, and answered questions. - Successful cancellation of the default judgment.
Thanks to thorough preparation and convincing argumentation, on February 21, 2025, the court successfully canceled the default judgment. This allowed the case to proceed to full substantive consideration, ensuring the client's right to a fair trial. - Proving debt extinguishment under the Bankruptcy Code.
After the default judgment was canceled, the lawyer proved to the court that the client's debt falls under the regulation of the Code of Ukraine on Bankruptcy Procedures and, in accordance with its provisions, should be considered extinguished, as LLC "Business Loan" missed the deadlines for asserting claims in the insolvency case. - Justification of the plaintiff's bad faith.
Separately, clear and substantiated arguments were provided to the court that LLC "Business Loan"'s actions were in bad faith, as the company deliberately attempted to circumvent the legally established procedure for asserting monetary claims within the insolvency case.
Result: On March 28, 2025, the court ruled to deny LLC "Business Loan"'s claims in full. This decision was an absolute victory for client Ruslan. The court fully protected his financial interests, recognizing the claims as unsubstantiated and contrary to law (case № 911/2659/23).
This case is a vivid confirmation that timely and qualified legal assistance can save a client from unlawful collections, even in complex situations where creditors attempt to abuse procedural norms. Ruslan's victory demonstrates the effectiveness of a legal strategy based on a deep understanding of bankruptcy legislation, procedural norms, and the ability to counter unscrupulous actions by financial institutions. This restores trust in justice and confirms that citizens can successfully defend their rights, even when it seems all deadlines have passed.
