Settlement of mortgage and credit relations in war conditions
Author: Victoria Doskovska, attorney at Dynasty Law & Investment
The issue of regulating mortgage and credit relations has been quite acute since the beginning of the full-scale invasion. An important step in solving this issue was the adoption of Law No. 2823-IX, which introduced the possibility of suspending payment or canceling debt under a credit agreement.
The right to stop payment of any payments under the credit agreement arises exclusively for consumer loans secured by real estate that meets at least one of the following criteria:
- located in the temporarily occupied territory or in the territory of hostilities;
- significantly damaged as a result of the armed aggression of the Russian Federation;
- destroyed as a result of the armed aggression of the Russian Federation.
The term of such suspension is for the duration of martial law in Ukraine plus 90 days.
The suspension is canceled in case of restoration of such immovable property at the expense of the state or receiving compensation for it.
In addition, within 90 days after the end of martial law, the borrower has the right to cancel the debt under the consumer loan if the following conditions are met:
- such a loan is secured by destroyed real estate in the Russian Federation, which is the only home of the borrower and his family, or by a car, if the borrower’s family had no other cars as of February 23, 2022;
- as of February 23, 2022, the arrears on such a loan did not exceed seven days;
- the loan was obtained specifically for the purpose of purchasing such housing or a car.
In the case of cancellation of the debt under the credit agreement, the creditor will be able to satisfy its claims for the principal amount of the debt at the expense of the state of Ukraine, and the losses caused by such cancellation will be compensated at the expense of the Russian Federation.
Dynasty Law & Investment specialists will help you deal with all the intricacies of such procedures.