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In Ukraine, allowed to take out apartments for debts on loans

The new Bankruptcy Code abolishes the moratorium on foreclosing non-payers for loans.

 The Verkhovna Rada adopted the new Code of Bankruptcy procedure, which sets a five-year period for the restructuring of mortgage currency loans and abolishes the moratorium on foreclosing non-payers for loans. This is on Thursday, October 18th, according to FinClub.

"Since the entry into force of this Code, the law of Ukraine on the moratorium on the collection of property of citizens of Ukraine, granted as collateral in foreign currency, expires," the document reads.

 The moratorium was introduced in 2014 and led to the fact that few of the foreign currency borrowers serve their mortgages.

At the same time, the Bankruptcy Code introduces a five-year special regime for the restructuring of currency mortgages. For example, the requirements of a secured creditor arising out of a loan in a currency are converted into hryvnia at the rate of the NBU on the day the insolvency proceedings are opened and are repaid by the debtor in accordance with the restructuring plan at a rate of 100% of the market value of the apartment or residential building determined by the appraiser chosen by the creditor , reports the publication.

In case the total area of the apartment does not exceed 60 square meters. m (or not more than 13,65 sq. m of living space for each member of the debtor's family) or the total area of a residential building not exceeding 120 square meters. m, then the interest rate on such a restructuring plan is set at the level of the Ukrainian index of rates for 12-month deposits of individuals (UIRD), increased by 1 pp. "The restructuring plan is for 15 years, unless otherwise agreed by the parties," the Code says.

It is noted that now the UIRD index is 15.36%.

 At the same time, if the real estate area is larger, then "the interest rate for such a restructuring plan is set at the level of the Ukrainian rate of interest on 12-month deposits of individuals (UIRD), increased by 3 pp," and the restructuring plan is for 10 years.

 Note that by the end of September household indebtedness to commercial banks amounted to almost UAH 200 billion.

Source: Correspondent.net

(translated using google translate)