Can't pay your loans: in which cases you can declare yourself bankrupt
Citizens of Ukraine who, due to financial difficulties, can no longer fulfill their monetary obligations to creditors have the right to initiate insolvency proceedings. This mechanism is provided for by the Bankruptcy Procedure Code of Ukraine and is aimed at settling debt obligations and restoring the debtor's solvency.
When you can apply to the court
Insolvency is considered the debtor's inability, after the established deadline, to fulfill monetary obligations to creditors other than through the procedures defined by bankruptcy legislation.
There can be several grounds for an individual to apply to the court with a petition to open insolvency proceedings. In particular, if the debtor has stopped repaying loans or other scheduled payments exceeding 50% of the monthly payments for each obligation for two months.
Another ground is the absence of property that can be seized if the enforcement officer's measures to locate it have been unsuccessful. Additionally, the law provides for the possibility of applying to the court if there are signs of a threat of insolvency.
Which documents need to be submitted
To start the procedure, the debtor must submit an application to the commercial court at their place of residence. It is necessary to attach documents confirming the person's property status, income, and obligations, as well as a draft debt restructuring plan.
What the court can decide
After opening the proceedings, the court may introduce a debt restructuring procedure, appoint an arbitration manager, and establish a moratorium on satisfying creditors' claims. In cases defined by law, the person may be declared bankrupt and proceed to the debt repayment procedure.
The Ministry of Justice emphasizes: the insolvency procedure is not a way to avoid responsibility for debt obligations. Its main goal is the lawful settlement of the debtor's financial problems and creating conditions for restoring their solvency. At the same time, the legislation provides a number of legal consequences for persons declared bankrupt.
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