Debt restructuring: how it helps solve the problem of insolvency

The insolvency process can be an effective way to resolve debt problems that many people face. If a decision has been made to use this mechanism, the first step is to file a complaint with the commercial court requesting the opening of insolvency proceedings, as noted by the Press Center of the Dnipro Interregional Department of the Ministry of Justice.

According to Parts 2–4 of Article 116 of the Code of Ukraine on Bankruptcy Procedures, the debtor is obliged to comply with specific requirements when drawing up an application. According to Part 4 of this Article, the application must be accompanied by a proposal for debt restructuring, prepared in the form of a “debt restructuring plan”.

This document provides a detailed overview of the debtor’s financial and property status, and also contains proposals for full or partial repayment of the debt. It is on this basis that the final plan will be developed, which is subject to approval by creditors and the court.

The main elements that must be included in the restructuring plan include:

the reasons for the insolvency;

the creditors’ claims confirmed by the court, with a breakdown of the amounts and the order of their repayment;

a description of the financial and property status after the inventory conducted by the restructuring manager;

sources of income, including projected ones;

the monthly amount of living expenses (not less than one subsistence minimum per person and each dependent), as well as funds for mandatory payments (for example, alimony);

information on the possible sale of property, including secured mortgaged property;

changes to the methods, terms, procedure, or amounts of the performance of obligations;

cases of postponement, installment, or partial write-off of debts;

performance of obligations by third parties through surety and guarantee agreements;

additional measures to improve the financial situation.

In particular, it is worth paying attention to the coordination of certain aspects of the plan with creditors, especially regarding deferrals, installments, debt write-offs, and modifications of the terms of their implementation. Joint work on these aspects can facilitate the approval of the plan.

Earlier, it was reported about important rules that Ukrainians must follow in the field of property. Information was also announced regarding gas supply schedules, which may affect citizens’ lives.