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Publication date: 20.05.2024
lawyer, 23 years of experience in enforcement.
Repayment of debts within the limits of bankruptcy of an individual and FOP
ТекстAt the end of 2018, the Verkhovna Rada of Ukraine adopted the Code of Ukraine on Bankruptcy Procedures (hereinafter referred to as the Code) and since then it has become possible to write off debts through bankruptcy not only of legal entities, but also of individuals or individual entrepreneurs.
Therefore, if the debtor is a natural person, has significant debts to various banking or financial institutions and lacks the financial ability to pay them, it is possible to declare such a natural person bankrupt, after which all debts are subject to write-off.At the end of 2018, the Verkhovna Rada of Ukraine adopted the Code of Ukraine on Bankruptcy Procedures (hereinafter referred to as the Code) and since then it has become possible to write off debts through bankruptcy not only of legal entities, but also of individuals or individual entrepreneurs.
Therefore, if the debtor is a natural person, has significant debts to various banking or financial institutions and lacks the financial ability to pay them, it is possible to declare such a natural person bankrupt, after which all debts are subject to write-off.
According to the norms of Article 115 of the Code, the grounds for applying to the court with a declaration of insolvency of the debtor are:
1. the debtor stopped repaying loans or making other scheduled payments in the amount of more than 50 percent of monthly payments for each of the credit and other obligations within two months
2. the debtor does not have any property that can be subject to foreclosure, and the measures taken by the executor in accordance with the Law of Ukraine "On Enforcement Proceedings" to search for such property turned out to be fruitless;
3. there are other circumstances that confirm that in the near future the debtor will not be able to fulfill monetary obligations or make regular current payments (threat of insolvency).
Bankruptcy proceedings can be opened only at the request of the debtor.
After declaring a natural person bankrupt and introducing the debtor's debt repayment procedure, and no later than 30 days after the introduction of the said procedure, the debtor, together with the property manager, jointly conducts an inventory of the debtor's property and determines its value.
Article 131 of the Code defines the list of property that belongs to the liquidation mass, but at the request of the debtor and other participants in the insolvency proceedings, property that may be levied under the law but is necessary to satisfy urgent needs may be excluded from the composition of the liquidation mass needs of the debtor or his family members.
To satisfy the demands of creditors, the funds from the sale of the debtor's property are deposited into a separate bank account opened by the manager of the sale of the property.
The first stage is the reimbursement of expenses related to proceedings in the case of insolvency, namely, expenses for payment of court fees, payment of remuneration and reimbursement of expenses of the arbitration manager, related to his performance of his powers, payment of specialist services for carrying out property valuation objects to be sold, as well as the costs of the auction.
The next stage is the satisfaction of creditors' claims for the debtor's obligations secured by the pledge of the property of an individual - at the expense of such property.
In accordance with the Code, the funds received from the sale of the bankrupt's property, which is the subject of security, after covering the expenses related to the maintenance, preservation and sale of this property, and the payment of the additional remuneration of the arbitration administrator in accordance with the provisions of the Code, are used exclusively to satisfy the creditor's claims under obligations secured by such property.
In accordance with the norms of Article 133 of the Code of Ukraine on Bankruptcy Procedures, creditors' claims included in the register of creditors' claims are satisfied in the following order:
- first of all, the requirements to the debtor regarding payment of alimony, compensation for damage caused by mutilation, other health damage or death of a natural person, payment of insurance premiums for mandatory state pension and other social insurance are satisfied;
- in the second place, the requirements for the payment of taxes and fees (mandatory payments) are met and settlements are made with other creditors;
- in the third instance, penalties (fines, penalties) entered in the register of creditors' claims are paid.
The requirements of each subsequent stage are satisfied at the expense of funds from the sale of the debtor's property after the requirements of the previous stage have been fully satisfied
If the funds received from the sale of the bankrupt's property are insufficient to fully satisfy all the claims of one phase, the claims are satisfied in proportion to the amount of claims belonging to each creditor of one phase.
Claims not satisfied due to insufficient assets of the debtor are considered repaid.
Part 7 of Art. 133 of the Code of Ukraine on Bankruptcy Procedures contains an exception for claims that are reimbursed even if the property is insufficient. Such claims are filed in civil proceedings.
Therefore, declaring a natural person bankrupt or bankrupting a fop is a fairly effective way to get rid of debt collectors.
Specialists of the legal service "Consultant" will conduct a legal analysis of the situation, help to prepare and submit an appropriate statement to the court, and accompany the bankruptcy of an individual at all stages.
