Ruslan Sydorovych: Stop speculating on the issue of the Bankruptcy Code

It seems that the “treason above all” attitude is negatively affecting the minds of Ukrainians and they begin to see evil even where there is none. Ruslan Sydorovych, co-author of the law No. 8060 on bankruptcy proceedings, explains the essence of the adopted law:

Myth 1: The debtors will have their only housing taken away.

This is absolutely not true; no one will take away people’s homes. We are talking about people who took a currency mortgage in the pre-crisis times. Of course, now it is difficult to pay. Their debt will be restructured. The law allows writing off the skyrocketing debts, which accumulated due to the devaluation of the hryvnia, arriving at some adequate amount of debt, and paying it off by installments during 10-15 years at minimum interest. In hryvnias, not in dollars! So the person keeps his/her home and does away with the debt.

Problems can only occur for those borrowers who had taken a loan, have not paid anything and are not going to pay. But there are very few such people; as a rule, people do pay off their debt – some of them more, some of them less.

So, the algorithm for repaying foreign currency loans is as follows:

  1. a) the amount of debt is initially determined on the basis of the cost of the real estate at a time a court case was opened at the initiative of a person. Apartments that were bought on foreign currency credits at times of high prices are often now 3-5 times cheaper.
  2. b) the funds that have already been paid are deducted from the initial amount of debt.

In the case of some borrowers, the amount of funds is equal, and in some cases even exceeds the current price of the apartment. The amount of debt exceeding the difference shall be written off.

  1. c) The difference that remains is restructured as follows:

1) for the owners of apartments, up to 60 square metres or if each resident has less than 13.65 square meters (this is if the apartment is larger than 60 sq. m.), or of private houses up to 120 sq. m, the balance will be restructured in 15 years with an interest rate for deposits of individuals +1%

2) for the owners of apartments and real estate, whose area is larger than in the previous paragraph, the balance will be restructured in 10 years with an interest rate for individuals’ deposits +3 percent

3) the debtor and the bank may establish other conditions for restructuring, but not worse than those given.

Myth 2: Samopomich introduced an amendment that cancels the moratorium on evicting bank debtors.

There has never been a moratorium on imposing penalties on mortgage loans in hryvnias. The law of 2014 introduced a moratorium on foreclosure of real estate issued only for foreign currency loans.

It is true that after a year and a half from the moment of publication, the moratorium loses its power, but all those willing to restructure the debt will have a year to begin the process.

And the corresponding amendment was made on behalf of the committee, and not by someone from Samopomich personally.

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