Debt restructuring procedure of an individual

Abstract

The article examines the procedure for restructuring debts of an individual in the process of bankruptcy. It is noted that the relevance of this article in the context of the procedure for restructuring the debts of an individual in the process of bankruptcy is determined by the need to understand and develop mechanisms that will allow debtors with financial difficulties to receive effective support and preserve their rights during such procedures. On the basis of judicial practice, it is determined that the restructuring of the debtor’s debts is the first, mandatory and priority stage of the case of insolvency of a natural person, in which the debtor can exercise the right to change the method and order of debt payment, taking into account his objective capabilities and desire to settle with by creditors, having guarantees of leaving part of the income to meet household needs and can receive forgiveness (write-off) of creditor claims or part of them. The mechanism of drawing up a plan for restructuring the debts of an individual is analyzed. It was concluded that the restructuring of the debts of an individual is the optimal way to end the bankruptcy case both for the individual and for his creditors, since his solvency is restored and debts are repaid. The procedure for restructuring the debts of an individual will be implemented on the condition that the debtor implements the restructuring plan on time and in full. Based on the analysis of judicial practice and legislation, including European countries, it is proposed to implement out-of-court debt restructuring of an individual, namely the approval of a restructuring plan based on a settlement agreement between an individual and creditors. It is argued that a general retreat from excessive formality and burdensome procedures in restructuring the debts of individuals in Ukraine can contribute to improving the efficiency of this process and protecting the interests of all parties. Such implementation will help to improve the efficiency and accessibility of the debt restructuring procedure of natural persons in Ukraine, contributing to solving financial difficulties of citizens and ensuring the stability of the country’s financial system.