Debtors may lose their homes: what the new debt collection law entails.

The Parliament of Ukraine passed a bill on debtors

The Parliament of Ukraine has adopted a new bill that may significantly impact debtors, particularly the risk of losing their homes. Law No. 14005 provides for the digital transformation of the enforcement system to simplify the debt collection process. However, experts warn of potential negative consequences. According to the adopted law, an individual listed in the Debtors Register loses the ability to dispose of their property, including housing. Now such a person cannot sell, gift, or mortgage real estate until they pay off their debt. However, after fulfilling their obligations, the person is automatically removed from the debtors' register. Parliamentarians expressed concerns about certain aspects of the bill, noting that some of its provisions may infringe on debtors' rights to manage their property, which is not always related to the digitalization of enforcement proceedings. The adoption of this law has become one of Ukraine's commitments to the European Union, but delays in its approval could lead to a reduction in funding from the fifth tranche. Despite the positive intentions of the bill, its implementation raises concerns in society. It is important that the new debt collection rules do not threaten debtors' rights and are aimed at protecting their interests. Ingenuity in tackling debt obligations can significantly change the financial environment of the country, and therefore, it is crucial to monitor further steps in the implementation of this law.