Is it possible not to pay for the loan?

23/ 08/ 2022

Author: Genadiy Silvanovych, Attorney at Dynasty Law & Investment Currently, there is a situation where some Ukrainians actually do not have the opportunity to use their immovable and movable property, in particular due to their destruction or being in the occupied territory. However, despite the above, the debtors obligation to return the loan funds received by him for the purchase of real estate and/or a vehicle does not disappear anywhere. Therefore, in order to solve this problem, the Verkhovna Rada of Ukraine adopted draft law No. 7441-1 dated June 14, 2022, which proposes mechanisms for suspending and/or canceling the loan. Suspension of payment of monetary obligations under purchase and sale contracts, consumer credit or contracts, the subject of security of which is real estate (including an apartment, residential/garden/cottage house, new building or object of unfinished construction) or a vehicle is possible, if: such property is located in the temporarily occupied territory or in the territory where hostilities are taking place. real estate (vehicle) damaged as a result of hostilities, subject to restoration through current or major repairs or reconstruction. real estate (vehicle) destroyed as a result of hostilities, is not subject to recovery either through current or major repairs, or reconstruction, or is economically impractical in general. Loan forgiveness (cancellation) is possible under the following conditions (at the same time): the property destroyed as a result of hostilities is the only place of residence of the borrowers family. the area of real estate destroyed as a result of hostilities is not more than: 140 sq.m. (for an apartment) and 250 sq.m. (for a residential building). As for the destroyed single vehicle, its engine displacement must not exceed 2,500 cc. as of February 23, 2022, the borrower has no arrears on payments under the consumer credit agreement. the purpose of obtaining a loan in accordance with the consumer credit agreement is the purchase of real estate (its reconstruction, construction) or a vehicle that was destroyed as a result of hostilities. It should be noted that an application for credit freeze or cancellation together with supporting documents can be submitted during martial law and 3 months after its termination/cancellation or until receiving compensation from the state for destroyed/damaged property.

Author: Genadiy Silvanovych, Attorney at Dynasty Law & Investment

Currently, there is a situation where some Ukrainians actually do not have the opportunity to use their immovable and movable property, in particular due to their destruction or being in the occupied territory. However, despite the above, the debtor’s obligation to return the loan funds received by him for the purchase of real estate and/or a vehicle does not disappear anywhere.

Therefore, in order to solve this problem, the Verkhovna Rada of Ukraine adopted draft law No. 7441-1 dated June 14, 2022, which proposes mechanisms for suspending and/or canceling the loan.

Suspension of payment of monetary obligations under purchase and sale contracts, consumer credit or contracts, the subject of security of which is real estate (including an apartment, residential/garden/cottage house, new building or object of unfinished construction) or a vehicle is possible, if:

such property is located in the temporarily occupied territory or in the territory where hostilities are taking place.
real estate (vehicle) damaged as a result of hostilities, subject to restoration through current or major repairs or reconstruction.
real estate (vehicle) destroyed as a result of hostilities, is not subject to recovery either through current or major repairs, or reconstruction, or is economically impractical in general.

Loan forgiveness (cancellation) is possible under the following conditions (at the same time):

the property destroyed as a result of hostilities is the only place of residence of the borrower’s family.
the area of real estate destroyed as a result of hostilities is not more than: 140 sq.m. (for an apartment) and 250 sq.m. (for a residential building). As for the destroyed single vehicle, its engine displacement must not exceed 2,500 cc.
as of February 23, 2022, the borrower has no arrears on payments under the consumer credit agreement.
the purpose of obtaining a loan in accordance with the consumer credit agreement is the purchase of real estate (its reconstruction, construction) or a vehicle that was destroyed as a result of hostilities.

It should be noted that an application for credit freeze or cancellation together with supporting documents can be submitted during martial law and 3 months after its termination/cancellation or until receiving compensation from the state for destroyed/damaged property.