Credit Holidays in Ukraine: What Can Actually Be Written Off by Law.

According to ТСН: The issue of loan repayment remains a serious problem for Ukrainians during the war. Borrowers often confuse 'credit holidays' with a complete cancellation of debts, which can lead to negative consequences.

According to Ukrainian legislation, war is recognized as a force majeure circumstance, providing certain benefits for borrowers, but does not exempt them from the obligation to repay the debt.

Lawyer Ihor Yasko notes:

“Borrowers may be exempted from paying fines and penalties for late payments.”

When Can Repayment Be Temporarily Suspended

Lawyers advise stopping payments only in critical cases, such as:

• evacuation;

• lack of access to the banking system and the internet;

• being in an area of active hostilities.

Do Interest Rates Disappear?

Cancellation of fines does not mean that the principal loan amount or interest for its use disappears. The principal amount will remain, and interest will continue to accrue.

Ignoring the bank's requirements can lead to serious consequences, such as deterioration of credit history, transfer of the case to collectors, or lawsuits for debt collection.

It is only possible to negotiate the cancellation of accrued interest on an individual basis with the financial institution.

In What Cases Can a Loan Be Fully Wiped Out?

The law provides for two exceptional cases when a debt can be canceled:

1. Property Destroyed. If the housing or vehicle that was collateral for the loan is destroyed during hostilities, an inspection act and confirmation from the Chamber of Commerce and Industry is required.

2. Agreement with the Bank. Financial institutions may offer programs to write off part of the debt for those affected by the war, but this is their right, not their obligation.

A separate category of borrowers consists of military personnel. They have special privileges, and during their service and for 90 days after demobilization are not obliged to repay the principal loan amount and are exempt from paying penalties for late payments.

This provision is in effect throughout the entire period of martial law and the recovery period after service.

Thus, the issue of loan repayment during the war requires special attention, as mistakes can have serious financial consequences. It is necessary to familiarize oneself with the rights and potential assistance offered by financial institutions to protect oneself from sanctions and maintain the ability to resolve financial issues during difficult times.