Bankruptcy and insolvency

Insolvency proceedings are both a recovery mechanism for the creditor and a way for the debtor to deal with unmanageable debt. The roles differ, but both call for involvement at every stage.

When to get in touch

• a debtor is not paying and ordinary enforcement is getting nowhere
• insolvency proceedings have been opened against your company
• monetary claims need to be filed against a debtor
• an individual cannot service their debts and is looking for a lawful way out

What the lawyer does

• assesses whether the procedure makes sense and what it offers in your role
• prepares the petition to open proceedings, or the statement of monetary claims
• represents the client in the commercial court and at creditors’ meetings
• works with the insolvency practitioner and keeps the procedure under review
• analyses and challenges the debtor’s suspicious transactions
• handles the personal insolvency procedure for individuals

Bankruptcy procedures: what applies to the debtor

• to a legal entity – property administration, rehabilitation and liquidation of a bankrupt (part 1 of Article 6 of the Code of Ukraine on Bankruptcy Procedures, the “Bankruptcy Code”);
• to an individual or individual entrepreneur – restructuring of the debtor’s debts and repayment of the debtor’s debts; repayment is introduced together with declaring the debtor bankrupt (part 2 of Article 6 of the Bankruptcy Code);
• the case is heard by the commercial court at the location of the legal entity or the place of residence of the individual; bankruptcy proceedings may be initiated by the debtor or a creditor, but insolvency proceedings against an individual only by the debtor (parts 1 and 2 of Article 8 of the Bankruptcy Code);
• property administration is introduced for up to 170 calendar days; the property administrator considers creditors’ claims, keeps the register of claims and analyses the debtor’s financial position (parts 2 and 3 of Article 44 of the Bankruptcy Code).

For creditors: how to file monetary claims

• the statement of claims and supporting documents are filed with the commercial court within 30 days from the official publication of the announcement that proceedings have been opened (part 1 of Article 45 of the Bankruptcy Code);
• proof of payment of the court fee and of sending a copy to the debtor and the property administrator must be attached (part 3 of Article 45);
• claims filed after that period are satisfied in the order of priority set by the Code, but such a creditor has no decisive vote at the creditors’ meeting or on the creditors’ committee (part 4 of Article 45);
• a secured creditor (pledgee) files claims for the part not covered by the value of the collateral, or after waiving the security (part 2 of Article 45);
• a moratorium is introduced when proceedings are opened: as a general rule, enforcement under writs is suspended, penalties, inflation adjustments and three per cent per annum do not accrue, and the limitation period is suspended (parts 2 and 3 of Article 41).

Challenging the debtor’s transactions

At the request of the insolvency practitioner or a creditor, the commercial court in the bankruptcy case may invalidate the debtor’s transactions made after proceedings were opened or within the three years before, if they infringed the rights of the debtor or creditors (parts 1 and 2 of Article 42 of the Bankruptcy Code). The grounds include:

• selling or buying property at prices below or above market value when the debtor’s assets were insufficient to satisfy creditors’ claims;
• disposing of property free of charge, a gift agreement, or waiving the debtor’s own property claims;
• an agreement with an interested party;
• performing property obligations ahead of time.

The other party must return what it received from the debtor or pay its market value, and those who made or approved the transaction bear subsidiary liability up to the amount of the loss caused to the debtor (parts 3 and 5 of Article 42).

Personal insolvency of an individual

• proceedings are opened only on the application of the debtor – an individual or individual entrepreneur (part 1 of Article 115 of the Bankruptcy Code);
• grounds: for two months the debtor has stopped paying more than 50 per cent of the monthly payments under each loan and other obligation; there is no property that can be levied, and the enforcement officer’s search for property has been unsuccessful; there are signs of a threat of insolvency (part 2 of Article 115);
• the application must be accompanied by, among other things, a list of creditors and debtors, an inventory of property and title documents, a list of pledged property, and documents on transactions with real estate, securities, shares and vehicles in the year before filing (part 3 of Article 116);
• a debt restructuring plan runs for up to five years (up to ten when a housing loan is being repaid); each month the debtor keeps at least one subsistence minimum for themselves and each dependant (clause 7 of part 2 and part 6 of Article 124);
• among others, alimony, compensation for damage caused by a criminal offence, injury, other harm to health or death, and the single social contribution are not restructured (part 1 of Article 125); the person is not released from alimony and such compensation even after the procedure ends (part 2 of Article 134).

Legal basis

Insolvency is governed by the Code of Ukraine on Bankruptcy Procedures: court procedures – Article 6; jurisdiction, venue and grounds for opening proceedings – Article 8; requirements for the petition – Article 34; the moratorium – Article 41; invalidation of the debtor’s transactions – Article 42; property administration – Article 44; creditors’ claims – Article 45; insolvency of individuals – Articles 113–134. These cases are heard by the commercial courts.

Legislation and case law are updated over time; this page reflects the position as of November 2026.

Frequently asked questions

What does insolvency offer a creditor?

The chance to file claims within the procedure, to influence it through the creditors’ meeting, and to challenge the debtor’s suspicious transactions.

Can an individual write off debts?

Yes, but only through the court and within insolvency proceedings. Part of the debts may be forgiven (written off) under the restructuring plan (clause 6 of part 2 of Article 124 of the Bankruptcy Code), and after the debt repayment procedure is completed the commercial court grants debt relief (part 1 of Article 134). There is no release from alimony, compensation for damage caused by a criminal offence, injury, other harm to health or death, or other claims inseparably linked to the person (part 2 of Article 134). What this means for a particular debtor depends on the structure of the debts and assets – we assess that case by case.

How long does a creditor have to file claims?

30 days from the official publication of the announcement that bankruptcy proceedings have been opened (part 1 of Article 45 of the Bankruptcy Code). Claims filed later are satisfied in the order of priority set by the Code, but such a creditor has no decisive vote at the creditors’ meeting or on the creditors’ committee (part 4 of Article 45).

Can a creditor start insolvency proceedings against an individual?

No. Insolvency proceedings against an individual or individual entrepreneur are opened only on the debtor’s own application (part 2 of Article 8; part 1 of Article 115 of the Bankruptcy Code). Against a legal entity, a creditor may also apply to open bankruptcy proceedings (part 2 of Article 8).

Need legal assistance? Call us or leave a request – a lawyer will contact you and explain what to do in your situation.