THE ANTICREDIT: How to Get Rid of or to Reduce the Debt Burden
03.03.2010
On March 3, 2010 the LF "Moskalenko & Partners” held a workshop called "Anti credit: how to get rid of or to reduce the debt burden” which was attended by lawyers and financial advisers, as well as those who have their own problematic debts.
Partner Law Firm "Moskalenko & Partners" Anastasiya Moskalenko - the first speaker – made a brief overview of legal ways to get rid of problematic debt, their advantages and disadvantages, potential risks. According to Ms. Moskalenko, such methods are: "vacation credit", the extension of credit, the transition from the normal mode of lending to an annuity, novation (substitution of the debtor's obligations), the sale of mortgaged property, termination of contract in connection with a substantial change in circumstances, with the loss of interest, breach of contract by the other party or on other grounds, invalidation of the contract; "tax credit" and others. Anastasiya noticed that the relationship between the bank and the debtor under a credit agreement must be based on civil law principles of equity, fairness and reasonableness, so the debtors should not be afraid to defend their rights. Of particular importance in this respect are the Article 3 Part 3, Article 551 and Article 652 of the Civil Code of Ukraine, as in the case of unfair pressure on the debtor by employees of financial institutions – the Article 355 of the Criminal Code (prohibiting the unlawful enforcement of civil liabilities).
The second speaker of the seminar - lawyer of the Law Firm "Moskalenko & Partners” Vladislav Galinsky told about the current judicial practice, the possible grounds for annulment of the loan agreement, the consequences of that decision to the debtor, and position of the National Bank of Ukraine concerning the possibility of invalidation of credit agreements entered into in foreign currency. Reporter concluded that the lack of a credit contract essential terms and conditions may sign grounds for declaring it invalid, but with regard to foreign currency loan contract the foreign currency may not be the only sufficient reason for making such a decision by the court.
Concluding the seminar, Julia Kondratska, partner of the LF "Moskalenko & Partners” drew attention to the ten most common violations of banking legislation of Ukraine at the conclusion of the loan agreement: a one-time payment of commissions (fees) for loans, not providing clients with written information on loan terms before entering into contract; lack of methodologies used by the bank to determine the exchange rate, terms and commissions associated with conversion of currency into the currency of payment obligations during the debt repayment on the loan and interest payments for the use of them, increasing the amount of interest in unilaterally forcing customers before signing a contract of insurance for loan only for the insurers agreed to the bank, so-called "accreditation"; weaning mortgaged car fraudulently under the pretext of "planned inspection and deposited it in the bank" a fine-ground "and others.
The lion's share of the report of Ms. Julia was devoted to topical issues of enforcement proceedings to recover the loan debt; possibility to appeal most actions of the Executive, the circumstances surrounding the suspension of compulsory execution; features of the evict of debtor.
At the end of the seminar Ms. Kondratska highlighted recent news of legislation in the field of problematic debts and provided the final general advice to their owners.
The event took place with the assistance of All-Ukrainian Public Organization "The Quality of Life", media partner -"The Legal Newspaper".
Partner Law Firm "Moskalenko & Partners" Anastasiya Moskalenko - the first speaker – made a brief overview of legal ways to get rid of problematic debt, their advantages and disadvantages, potential risks. According to Ms. Moskalenko, such methods are: "vacation credit", the extension of credit, the transition from the normal mode of lending to an annuity, novation (substitution of the debtor's obligations), the sale of mortgaged property, termination of contract in connection with a substantial change in circumstances, with the loss of interest, breach of contract by the other party or on other grounds, invalidation of the contract; "tax credit" and others. Anastasiya noticed that the relationship between the bank and the debtor under a credit agreement must be based on civil law principles of equity, fairness and reasonableness, so the debtors should not be afraid to defend their rights. Of particular importance in this respect are the Article 3 Part 3, Article 551 and Article 652 of the Civil Code of Ukraine, as in the case of unfair pressure on the debtor by employees of financial institutions – the Article 355 of the Criminal Code (prohibiting the unlawful enforcement of civil liabilities).
The second speaker of the seminar - lawyer of the Law Firm "Moskalenko & Partners” Vladislav Galinsky told about the current judicial practice, the possible grounds for annulment of the loan agreement, the consequences of that decision to the debtor, and position of the National Bank of Ukraine concerning the possibility of invalidation of credit agreements entered into in foreign currency. Reporter concluded that the lack of a credit contract essential terms and conditions may sign grounds for declaring it invalid, but with regard to foreign currency loan contract the foreign currency may not be the only sufficient reason for making such a decision by the court.
Concluding the seminar, Julia Kondratska, partner of the LF "Moskalenko & Partners” drew attention to the ten most common violations of banking legislation of Ukraine at the conclusion of the loan agreement: a one-time payment of commissions (fees) for loans, not providing clients with written information on loan terms before entering into contract; lack of methodologies used by the bank to determine the exchange rate, terms and commissions associated with conversion of currency into the currency of payment obligations during the debt repayment on the loan and interest payments for the use of them, increasing the amount of interest in unilaterally forcing customers before signing a contract of insurance for loan only for the insurers agreed to the bank, so-called "accreditation"; weaning mortgaged car fraudulently under the pretext of "planned inspection and deposited it in the bank" a fine-ground "and others.
The lion's share of the report of Ms. Julia was devoted to topical issues of enforcement proceedings to recover the loan debt; possibility to appeal most actions of the Executive, the circumstances surrounding the suspension of compulsory execution; features of the evict of debtor.
At the end of the seminar Ms. Kondratska highlighted recent news of legislation in the field of problematic debts and provided the final general advice to their owners.
The event took place with the assistance of All-Ukrainian Public Organization "The Quality of Life", media partner -"The Legal Newspaper".
