Loan debt restructuring

In 2020, during the economic crisis, the topic of loan debt restructuring has become extremely popular.

According to the National Bank of Ukraine, loan debt restructuring will be mandatory for both large and medium-sized businesses, as well as for individuals. Each loan restructuring must be considered on a case-by-case basis. Many factors can influence the process of restructuring business loan debt. For example, it is very important to consider the financial position of a company when the coronavirus lockdown began, and whether it will be able to recover from the economic crisis.

Restructuring of loans for legal entities and individuals

It is no secret that entire sectors of the Ukrainian economy suffered as a result of the lockdown introduced in 2020, and some of them have still not recovered. In this regard, banks have found an acceptable way to recover their capital and enable borrowers to overcome their financial difficulties:

• Development of programmes under which clients are granted a temporary deferral of payments;
• Capitalisation of interest payments;
• A ban on banks charging explicit or hidden fees during the restructuring process;
• The borrower is granted a ‘payment holiday’, followed by debt restructuring over a longer period. Some banks allow only part of the interest to be paid for approximately a year, but the principal will still have to be repaid eventually. This type of loan debt restructuring is considered the most common;
• Loan extension;
• Fundamental change to the loan repayment schedule;
• Deferral of the loan principal repayment, without extending the loan term. This method of restructuring is not particularly advantageous for the borrower, as the payment amounts following debt restructuring will be significantly higher.

It should be noted that the bank’s process for reviewing a debt restructuring application is lengthy and the bank is very meticulous in its assessment.

Therefore, legal support for loan debt restructuring is simply essential for you.

Our legal assistance with loan restructuring includes:

• Representing the borrower’s interests, including personal and written communication between the lawyer and bank staff;
• Developing the most effective proposals for restructuring the bank client’s debt on mutually beneficial terms;
• A lawyer’s review of all relations between the bank and the borrower;
• Collection and submission of all documents relating to loan debt restructuring.

Call +38 096 554-54-25 for a free consultation!