Quite often debtors have a question: ‘Is it Legal not to continue payments on the loan, if I do not have such an opportunity?’. The forgiveness of credit by the Bank at present (conditions) is regulated by the agreement concluded between the lender and the lender. Following article 605 of the civil code, the Bank can forgive a loan to the debtor if it will not violate the interests of third parties in relation to the property that belongs to the Bank. In practice, the Bank can forgive both the entire debt and part of it.
From the experience of Kasyanenko & Partners Law Company, we can say that Banks resort to debt forgiveness in very extreme cases. In addition, the current legislation does not specify the grounds for such an action.
Most often, the development of events occurs as follows: the Bank does not make concessions on the restructuring of the loan and charges fines to the debtor, the debtor continues to pay on the loan, but this money is only used to pay penalties for delay, and not to pay interest or loan repayment. Since the loan body and interest for its use are not repaid, the Bank continues to charge fines, thereby making the loan really unaffordable for the borrower.
Also, it is important to note that Banks, following article 159 of the tax code, can write off bad debts to the insurance reserve even if the debt does not meet the criteria of bad (established by the NBU).
Lawyers and attorneys of Kasyanenko & Partners Law Company together with Banking institutions have developed a set of methods that can significantly reduce the total debt of the borrower: the transition to equal payments, deferral of payments on the loan, increase the term of use of the loan (up to 10 years), etc. because, in this case, the borrower is important not the very structure of payments, and those amounts that will monthly leave the family budget.