Parliament Passes Draft Law No. 14005
Ukraine's parliament, the Verkhovna Rada, has passed draft law No. 14005, establishing an automated system for debt recovery that restricts a debtor's ability to dispose of their property. The legislation received support from 250 deputies. Its primary goals are to protect a debtor's sole residence and to integrate the enforcement service with state registries, banks, and other authorities. This reform aims to modernize a system that has historically faced challenges with inefficiency and enforcement.
Once an individual is listed in the Unified Debtor Register, they will be prohibited from selling, gifting, or re-registering their property until the debt is settled. These restrictions will be lifted automatically upon repayment. Importantly, recovery actions can only be initiated based on a court decision. The threshold for the potential seizure of a sole residence has been raised from 20 to 50 times the minimum subsistence level (MSL). These changes are designed to enhance protections for debtors' rights.
Furthermore, the law prohibits the seizure of the sole residence of military personnel during martial law and for one year after its termination. Seizure is also not permitted if the total debt does not exceed 432,000 hryvnias. As noted by MP Ihor Fris:
'There is nothing additional in the law that would allow the seizure of a debtor's sole property. On the contrary, the threshold has been increased from the current 20 to a future 50 MSL, at which point housing can be seized only by court order.'
Impact of the New Regulations
Under the new rules, after being entered into the debtor register, notaries will be barred from certifying sale or gift agreements, banks will block transactions that may indicate attempts to avoid recovery, and the Interior Ministry's services will not permit the re-registration of vehicles. These measures are intended to ensure the effectiveness of the new debt recovery system while safeguarding debtors' rights.
In addition to draft law No. 14005, the Verkhovna Rada also passed draft law No. 15110, which extends the validity of the military levy for three years after the end of the war. This bill was supported by 257 deputies.
The adoption of draft law No. 14005 marks a significant step in reforming Ukraine's debt recovery framework. It seeks to provide greater protection for debtors, particularly those with only one home. The introduced amendments reflect a clear trend toward humanizing debt collection practices, which could positively impact social stability. The extension of the military levy underscores the state's commitment to maintaining financial support in the face of ongoing military challenges.
In addition to the recent reforms in debt recovery, the Ukrainian Parliament has also taken significant steps to bolster military funding. This move is part of a broader strategy to enhance support for the Armed Forces, ensuring that all military levy funds are directed towards their needs. To learn more about how these financial adjustments impact national security, see our coverage on the allocation of military resources.