Bankruptcy proceedings for individuals

Personal bankruptcy is not a ‘clever way to avoid paying’, but a legal procedure with its own costs and consequences. It does indeed allow you to have your debts to banks, microfinance organisations and debt collectors written off. However, it does not write off maintenance payments, does not write off compensation for harm to life and health, and restricts your access to loans and business activities for several years. Therefore, the key question during a consultation is not ‘how to file for it’, but whether it is actually in your best interests. Sometimes debt restructuring is cheaper, sometimes the debt can be contested altogether, and sometimes bankruptcy is the only way out. We calculate this honestly: how much the procedure will cost, what you will lose, what will be written off, and what will remain.

+38 095 554-54-24 — legal advice

Who can file an application

The grounds are set out in the Ukrainian Code of Bankruptcy Procedures. Any one of them is sufficient:

• the debt amounts to at least 30 minimum wages;
• the debtor has ceased to repay loans or other scheduled payments amounting to more than 50 per cent of monthly payments;
• a state or private enforcement officer has drawn up a report confirming that the debtor has no assets against which enforcement proceedings can be brought;
• there are other circumstances confirming the risk of insolvency.

Important: the case is heard by the commercial court, and bankruptcy proceedings for an individual can be initiated only by the debtor themselves — creditors do not have this right.

What are the benefits of commencing proceedings?

This takes effect immediately, even before debts are written off:

• the accrual of fines, penalties and interest is suspended;
• the amount of the debt is fixed as at the date proceedings are commenced;
• enforcement proceedings are suspended, and account freezes are lifted;
• debt collectors and banks lose the right to demand payment directly — all claims must go through the court;
• a moratorium on the satisfaction of creditors’ claims comes into effect.

For someone whose entire salary is being garnished and whose phone is ringing off the hook with calls from debt collectors, this is often more important than the debt write-off itself.

Two procedures

1. Debt restructuring. The administrator and creditors agree on a plan: deferral, reduced payments, partial write-off of penalties and interest. The plan must be approved within 120 days from the date proceedings are opened. If the plan is approved, you pay according to the new schedule and retain your assets.2. Debt settlement (declaration of bankruptcy). If the plan is not approved, the court declares the debtor bankrupt. Assets (other than those exempt from seizure) are sold, the proceeds are distributed amongst the creditors, the remaining debt is written off.

What is NOT written off

Those who market bankruptcy as a ‘magic button’ fail to mention this:

• maintenance payments;
• compensation for harm caused to life and health;
• claims which the debtor failed to disclose in their application (hidden creditors);
• debts arising after the commencement of proceedings.

Furthermore, debt obligations are not written off if the court finds that the debtor acted in bad faith: concealed assets, provided false information, or took out loans with no intention of repaying them.

Consequences to consider

• for five years, when applying for a loan, you are obliged to disclose the fact of bankruptcy;
• for three years, you will not be regarded as a person of impeccable business reputation — this restricts your eligibility for management positions and certain types of activity;
• your assets will be sold — except for everyday household items and other property that is exempt from seizure;
• mortgaged property is subject to special rules: everything here depends on the terms of the loan, and this issue in particular should be discussed separately during a consultation;
• you cannot file for bankruptcy again for at least five years.

How much does it actually cost?

The main reason why applications ‘get stuck’: people focus on the court fee and forget about the rest.

• Court fees — 0.4 times the minimum subsistence level, i.e. 1,331.20 UAH (2026). This is indeed a small amount: for a standard claim for a debt of 500,000 UAH, the fee would be 7,500 UAH.
• Advance payment of the insolvency practitioner’s remuneration — three times the minimum wage for three months’ term of office. This is the main expense, and without it, the application is rejected.
• Lawyer’s fees for handling the proceedings.
• Costs of valuing and realising the assets.

According to case law, one in five applications from individuals is rejected precisely because of financial or technical errors: an unpaid fee, or an advance payment transferred to the wrong account.

When bankruptcy is not necessary

Let’s be clear, as the market is full of adverts promising ‘we’ll write off all your debts’:

• the debt is small — the costs of the procedure will eat into any benefit;
• the main debt is maintenance — this is never written off;
• you have valuable assets that you are not prepared to lose;
• the debt can be contested — unlawful interest charged by microfinance organisations, the limitation period having expired, or an invalid guarantee agreement. Sometimes it is cheaper to win a court case than to file for bankruptcy;
• the bank is willing to restructure the debt — this is usually cheaper and has no negative consequences.

Bankruptcy is justified when the debt is substantial, there is objectively no income to repay it, and pressure from creditors makes a normal life impossible.

How we work

1. We assess the feasibility — how much will be written off, how much it will cost, and what you stand to lose. This is the most important thing.
2. We check the debt — it may be that part of it is unlawful or that the limitation period has expired.
3. We prepare the application with a full set of documents — this is where one in five cases is screened out.
4. We manage the procedure — liaising with the insolvency practitioner and creditors.
5. We protect your assets — within the law, taking into account the list of assets that are exempt from seizure.
6. We ensure the write-off of debts and the closure of proceedings.

Cost of services

The following are charged separately: court fees of 1,331.20 UAH, an advance payment towards the insolvency practitioner’s remuneration (three times the minimum wage), and costs for the valuation and realisation of assets. Full price list · Debt restructuring

Questions and answers (Bankruptcy of a natural person)

What level of debt qualifies for filing for bankruptcy?

Any one of the following grounds is sufficient: debt of at least 30 minimum wages; failure to make over 50 per cent of monthly payments; a bailiff’s report confirming the absence of assets; or other circumstances indicating a risk of insolvency.

Will all debts be written off?

No. Alimony, compensation for harm to life and health, claims by hidden creditors and debts incurred after the commencement of proceedings will not be written off. Debts will also not be written off if the debtor has acted in bad faith.

Will my only home be taken away?

This is the most difficult question, and the answer depends on whether the property is mortgaged and under what terms. Each case must be assessed individually — there is no one-size-fits-all answer.

How much does the procedure cost?

Court fees — 1,331.20 UAH (2026). The main expense is the advance payment of the insolvency practitioner’s fee (three times the minimum wage). Plus the solicitor’s fee.

Will the calls from debt collectors stop?

Yes. Once proceedings have been opened, claims can only be settled through the courts, and the accrual of late payment interest and penalties ceases. Enforcement proceedings are suspended and asset seizures are lifted.

How long does bankruptcy take?

You have 120 days from the date proceedings are opened to have the restructuring plan approved. The entire procedure usually takes from one year, depending on the composition of the assets and the number of creditors.

What are the consequences for me after bankruptcy?

Five years — an obligation to disclose the bankruptcy when applying for a loan; three years — restrictions on business reputation; a second bankruptcy — no earlier than five years later.

Can a bank file for my bankruptcy?

No. Only the debtor themselves has the right to initiate personal bankruptcy.

What documents should I bring to the consultation?

Loan agreements, statements of debt, enforcement proceedings documents, property documents, proof of income, and a list of all creditors.

Contact a solicitor at Svarog regarding personal bankruptcy

Send us a list of your debts and property documents — we’ll work out how much can realistically be written off, how much the procedure will cost and what you stand to lose. If bankruptcy isn’t in your best interests, we’ll tell you straight and suggest an alternative: debt restructuring or challenging the debt. +38 095 554-54-24 · Kyiv, 7 Khoriva Street (Podil) · Mon–Fri 9:00–18:00