How to achieve a loan restructuring? The restructuring of foreign currency loans

Loan restructuring is a procedure in which the bank, at the request of the borrower, reviews the terms and conditions of the borrower's payment of a loan. The result of the loan restructuring is the signing by the bank and the borrower of changes to the loan agreement, containing new terms and conditions for the loan repayment agreed by the parties. Debt restructuring is necessary when the borrower, by virtue of certain objective life circumstances, is unable to repay a loan to the bank on terms determined by the original loan agreement.

At the same time, as stated above, the borrower initiates the loan restructuring, which, in order to begin the process of discussing the terms of the restructuring, must file an appropriate application for restructuring the loan to the bank with which it has a loan agreement.

As a rule, banks agree to restructure the loan debt only if the borrower is in such life circumstances that without restructuring, he will not be able to repay the loan to the bank at all. Such circumstances in the current situation in Ukraine may be relocation from the ATO area, loss of the workplace and the absence of any other source of income, loss (loss) of assets that generate income.

In the case of the bank agreed to restructure the loan restructuring, the following options:

- granting a deferral of payments on the body or interest of the loan for a certain period (the so-called "credit holidays");

- revision of the interest rate and / or the mechanism for its calculation;

- extension of the loan term;

- transfer of a foreign currency loan to a hryvnia.

With regard to such a topical issue as the restructuring of foreign currency loans in Ukraine, with the Law of 16.10.2011 N 3795-VI prohibited the provision of consumer loans in foreign currency. Thus, the restructuring of foreign currency loans is possible for loans received before 16.10.2011.

In connection with the rapid growth of the hryvnia exchange rate to foreign currencies in 2014, borrowers who have foreign currency loans, but the income received in hryvnia, were in an extremely unfavorable financial position. The government repeatedly tried to solve this issue at the legislative level, but today this question remains open. In particular, it was planned to limit the circle of borrowers who have the right to restructure the foreign currency loan to those who have mortgages for housing, which is the only one. Also, it was envisaged to write off penalties for such loans, accrued on January 1, 2014.

06/07/2014 The Law of Ukraine "On the moratorium on the collection of property of citizens granted as collateral for loans in foreign currency" entered into force on 03.06.2014. This Law has established a moratorium on the compulsory collection of immovable residential property, which is the subject of pledge as collateral for borrowers and guarantors of consumer loans issued in foreign currency.

Today, in Ukraine, the law regulating repayment and restructuring of loans of individuals in foreign currency is still not adopted. The Verkhovna Rada now has bill No. 4004-d "On restructuring the obligations of citizens of Ukraine for loans in foreign currency received for the purchase of housing", registered on August 17, 2016.

Also, on June 14, 2016 Verkhovna Rada of Ukraine adopted Law of Ukraine No. 1414-VIII "On Financial Restructuring", which provides for the possibility of financial restructuring for debtors-legal entities.

The right to participate in the procedure of financial restructuring under this Law is held by the debtor in a critical financial situation, and his economic activities can be considered promising.

The main role in the procedure of financial restructuring is assigned by the Law to creditors and financial institutions. Thus, financial institutions that are creditors of the debtor have the right to participate in this procedure.

The procedure of financial restructuring is carried out without resort to the court through negotiations between the debtor, its related parties and involved creditors regarding the restructuring of monetary obligations to such creditors in the manner prescribed by the Law.