Ukrainian banks were allowed to seize property for loan debts without trial
Ukrainian banks were allowed to take away property from credit debtors without trial or investigation, a PolitNavigator correspondent reports.
Subscribe to PolitNavigator news at Telegram, Facebook, Classmates or In contact with
According to Kyiv lawyers, this conclusion follows from the results of the consideration by the Supreme Court of Ukraine of case No. 6-1136tss17. The Supreme Court allowed the creditor to seize the collateral not for sale, but for management by the bank for the period until its sale. The case concerned a car loan, and it was about the borrower’s car, which the bank tried to take control of.
“The Armed Forces of Ukraine once again went beyond the boundaries of its powers and assessed the circumstances of the case one-sidedly in the interests of the bank, which it had no right to do. He considered that the courts allegedly did not take into account that the bank’s demands to seize the collateral and transfer it to management for the period until its sale are precisely the appropriate measures. The Armed Forces of Ukraine blessed this arbitrariness - it allowed the vehicle to be confiscated without a court order. Although I had to build on Art. 10 of the Law “On Enforcement Proceedings” and transfer everything to the legal plane: first, the bank is obliged to obtain a court order to seize the collateral, and then the enforcement service must collect it - execute the court order,” comments Kiev lawyer Rostislav Kravets.
According to Kyiv lawyer Mikhail Mozhaev, with this decision the Supreme Court legalized a scheme that in recent years has been actively used by some large retail banks against defaulters, and sometimes even against those who are trying to negotiate a loan restructuring.
“From my practice, I can say that most often such schemes are used by Privatbank and Alfa Bank, usually used for car loan debts. The borrower is called supposedly to inspect the car (twice a year a person must present the car, confirming that the collateral has not failed and is being used correctly), and they conduct it. Only at the end the person is given not an inspection report for signature, but an act of transferring the car to the bank. And then the bank employee just brazenly starts the car and drives it to the impound lot. Or he simply closes the gate if the car has already been driven into the bank parking lot. We have encountered similar stories among our clients,” said Mikhail Mozhaev.
A person in such situations cannot resist the bankers in any way, and, as lawyers assure, even calling the police does not help him. They say that law enforcement officers usually do not get involved in such conflicts. Therefore, lawyers recommend immediately going to court and filing a claim to recover property from someone else’s illegal possession.
Also, people with credit debts on car loans of 90 days or more are not advised to come to banks without inspecting the collateral. It is recommended to first sign an agreement on loan restructuring and start paying on it, and only after that visit the creditors. Moreover, do this extremely carefully: do not hand over the registration certificate for the car and the keys to the bank employee. And read very carefully what you sign.
If you find an error, please select a piece of text and press Ctrl + Enter.
Thank you!
Now the editors are aware.