Protection of Military Borrowers through the Court

In modern conditions, as Ukraine defends its independence, legal and social protection of military borrowers is especially important. Soldiers performing their duty to the Motherland often face financial difficulties that limit their ability to repay loans on time. The state develops support mechanisms, such as debt deferrals, restructuring, interest rate reductions, and moratoriums on fines, to ensure financial stability and fairness for defenders and their families.

The Importance of Legal Protection for Military Borrowers

Legal protection for military borrowers plays an important role, providing the opportunity to protect their financial rights and interests while fulfilling their military duties. During mobilization or participation in combat operations, soldiers may lose the ability to timely fulfill their loan obligations, leading to financial difficulties. Legal protection allows challenging unfair actions by banks, seeking debt restructuring, obtaining payment deferrals, and preventing the accrual of fines and penalties, thereby maintaining financial stability and supporting morale.

Legal Basis for Protecting Military Borrowers

The protection of the rights of military borrowers in Ukraine is regulated by several legislative acts that provide them with social guarantees and legal protection in the field of lending. The main ones are:

• The Law of Ukraine “On Social and Legal Protection of Servicemen and Their Families.” This law establishes the main principles of social and legal protection of servicemen, including ensuring their rights in the financial sphere. The law provides for benefits and compensations, as well as protection against unlawful actions by financial institutions.
• The Law of Ukraine “On the Status of War Veterans, Guarantees of Their Social Protection.” This law provides additional social guarantees and benefits for war veterans, including the deferral and restructuring of loan obligations.
• The Labor Code of Ukraine. Although this code primarily deals with labor relations, it also contains provisions for protecting the rights of workers, particularly servicemen, in the event of mobilization or participation in combat operations.
• Resolutions of the Cabinet of Ministers of Ukraine. The Cabinet issues several resolutions detailing the implementation of legislative norms, particularly regarding the provision of loan holidays, interest rate reductions, and other measures aimed at protecting military borrowers.
• Orders of the Ministry of Defense of Ukraine. The Ministry issues orders and instructions regarding the legal protection of servicemen, including financial aspects and interactions with banks.

Typical Problems Faced by Military Borrowers

Military borrowers often face several financial problems, especially while performing their duties. The most common situations include:

• Violation of contract terms. Banks and financial institutions sometimes violate the terms of loan agreements, such as failing to provide appropriate benefits or refusing to consider changes in the financial situation of servicemen caused by mobilization or participation in combat operations.
• Unlawful accrual of fines and penalties. There are often cases when financial institutions continue to accrue fines and penalties for overdue payments, despite legislative norms that provide for deferrals or exemptions from such accruals for servicemen.
• Refusal to restructure debt. Servicemen may face refusals from banks to provide debt restructuring, which involves changing the terms of the loan agreement to ease the financial burden. This can be particularly critical in cases where the individual is on the front line or has significant income limitations due to service.

Grounds for Going to Court

Military borrowers may go to court for various reasons related to the violation of their financial rights. One common reason is the violation of the loan agreement terms:

• Banks or other financial institutions do not fulfill the terms of the loan agreement, such as providing benefits established by law for servicemen.
• Unlawful changes to interest rates or other contract terms without proper notification or borrower consent.
• Refusal to grant deferrals or payment holidays provided for in the agreement in the event of mobilization or participation in combat operations.

Another reason for going to court is the unlawful actions of banks and other financial institutions, namely:

• Unlawful accrual of fines, penalties, or additional fees on the debts of servicemen who are on duty.
• Refusal to restructure the debt or grant a deferral on the loan repayment despite valid reasons from the borrower.
• Demanding immediate repayment of the loan without considering the borrower’s special status as a serviceman.

Other violations of servicemen’s rights:

• Lack of proper information about changes in loan terms or borrower rights.
• Forced debt collection accompanied by violations of legislation or borrower rights.
• Refusal to consider changes in the serviceman’s financial condition caused by service when assessing the ability to repay the debt.

Preparation for the Legal Process

Before going to court, it is important to thoroughly prepare by gathering all necessary documents and evidence that confirm the violation of your rights. Such documents include:

• A copy of the loan agreement with the bank or financial institution. Make sure you have all attachments and amendments to the agreement.
• Emails, paper correspondence, notifications, and other documents related to your interaction with the bank. These can be any requests, bank responses, debt repayment demands, and other communications.
• Documents confirming your status as a serviceman. These include mobilization orders, a combatant ID, certificates of participation in military operations, and other official documents.
• Bank account statements, payment receipts, income certificates, and other financial documents confirming your loan payments and financial condition.

If you face unlawful actions by the bank (e.g., unlawful fines, refusal to restructure), keep all documents that confirm this.

The Legal Process

The main stages of the legal process:

• Filing a lawsuit. At this stage, the plaintiff (military borrower) or their representative prepares a statement of claim outlining their demands to the defendant (e.g., the creditor or financial institution). The statement of claim should include a description of the situation, available documents, and the justification for the claim. After preparing the claim, it is submitted to the appropriate court. This can be a local court or another competent body, depending on the scope of the claims and the specifics of the case. The court registers the case, sets a hearing date, and notifies both parties.
• Consideration of the case in court. At this stage, the court may hold preparatory hearings to clarify the circumstances of the case, verify documents, and set the date for the main hearing. At the main court hearing, the case is directly considered. The court hears the parties, their representatives, witnesses, and examines all submitted evidence. Both parties have the opportunity to present their positions and arguments. After considering all the circumstances of the case, the court makes a decision. This can be a decision to satisfy the claim, partially satisfy it, or refuse the claim.
• Presentation of evidence. The plaintiff and defendant strive to gather all necessary evidence to support their claims or objections. This can include documents, testimonies, expert opinions, etc. Evidence is presented to the court during the main hearing or preparatory hearings. They must be relevant and admissible for court consideration. The court evaluates the submitted evidence, considering their weight and significance for the case. This helps the judge or judges make a justified decision.

Order of Execution of the Court Decision

After the court decision is made, the bank receives an official copy of the decision containing the obligations for execution. The bank studies the decision to understand what specific actions need to be taken. This may include returning a certain amount to the borrower, changing the loan terms, or other obligations specified in the decision. The bank performs actions according to the court decision. For example, if the court decides that the borrower has the right to return a certain amount of money, the bank makes the payment to the borrower’s account. In case of changes to the loan terms, the bank makes adjustments to the agreement terms.

The court decision sets specific deadlines for execution, or the bank must execute the decision within the standard deadlines defined by law. Generally, these deadlines start from the moment the decision becomes legally binding. The bank is obliged to execute the court decision within the specified deadlines. Non-compliance with deadlines can lead to legal consequences, such as the imposition of fines or other sanctions.

Delays in executing the decision can arise due to various circumstances, such as:

• Internal procedural issues in the bank;
• Technical problems;
• Incomplete or incorrect documents received from the court.

If delays occur, the bank must take measures to eliminate them. The borrower can also contact the bank with a request for the status of the decision execution or file a complaint to the court if the execution is delayed without justified reasons.

Monitoring the Execution of the Court Decision and Possible Additional Actions in Case of Non-Execution

After the bank receives the court decision, it must ensure its execution according to the established deadlines and conditions. The borrower or their representative can contact the bank to check the progress of the decision execution. The court can verify the documents submitted by the bank to ensure the decision was properly executed.

Possible additional actions in case of non-execution:

• If the court decision was not executed within the established deadlines, the borrower has the right to file a request to the court for the compulsory execution of the decision. The request is filed with the same court that made the decision.
• If the bank does not execute the decision voluntarily, the enforcement service can apply compulsory measures, such as arresting the bank’s accounts or property to ensure the decision execution.
• If there are disputes regarding the execution of the decision or its content, the borrower can file an appeal against the court decision or the actions of the bank that do not comply with the decisions.

Dextra Law provides professional legal assistance in preparing and conducting court cases, including cases related to the protection of the rights of military borrowers. A team of ambitious and experienced lawyers specializes in a comprehensive approach to solving legal issues and provides comprehensive support to clients at every stage of the legal process.

Do not leave your rights unprotected! If you are a military borrower facing issues with the execution of a court decision or other legal matters, Dextra Law is ready to help. Contact us right now to receive professional consultation and legal support.