Publication date: 06.06.2024
Non-payment of a loan: is there a risk of criminal liability?
Should I be afraid of criminal prosecution for debts and non-payment of loans in Ukraine? This question worries many people who, for one reason or another, find themselves in a difficult financial situation. Let's look at this situation in more detail.
According to current legislation, failure to pay a loan, loan or interest for using them is not in itself a criminal offense. That is, a debtor cannot be prosecuted and imprisoned simply because he does not repay the debt.
However, there are certain exceptions in which failure to repay a loan may still be considered a criminal offense and result in arrest, search or penalties. We are talking about cases where the debt arose as a result of fraud, theft, or misappropriation of someone else's property. In such situations, creditors may accuse the debtor of committing a criminal offense (fraud, embezzlement, theft, robbery). And then the issue will be considered within the framework of a criminal case.
Also, some difficulties may arise if the debtor deliberately conceals the existence of income or property that may be subject to foreclosure. Such actions may be qualified as deliberate concealment of property or income in order to avoid repayment of accounts payable (Article 389-1 of the Criminal Code) and entail criminal liability.
Therefore, in the case of “ordinary” loan default without aggravating circumstances, criminal prosecution is unlikely. However, in all other cases, it is best to consult with a qualified criminal lawyer or criminal defense attorney.
An experienced criminal defense attorney can help you assess your risk and develop an appropriate defense strategy should a criminal case be filed against you. A lawyer will be able to prove in court the absence of criminal intent and other qualifying signs of fraud or deliberate illegal mismanagement.
In addition, a criminal defense lawyer can help with negotiations on debt restructuring, petition for the removal of seizure of property or restriction of travel abroad. Also, a specialist in the field of criminal law will help to minimize the punishment as much as possible and may even prevent the opening of criminal proceedings.
The cost of a criminal defense lawyer can vary depending on the region, the complexity of the case, and the lawyer's experience, but these costs are generally much less than the potential penalties in a criminal case.
It is important to understand that criminal liability is only threatened in extreme circumstances of fraud, theft or deliberate concealment of property. In other cases, the state still prefers civil law mechanisms for debt collection. If you admit your debts in good faith and demonstrate your ability to pay, even if you temporarily default on your loan, you will not face jail time or felony criminal charges. The only requirement is to act in good faith within the limits of the law. And in difficult situations, it is better to immediately consult a criminal lawyer to protect your rights and interests
