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No more house, but debts left: What should IDPs and people on occupied territories do with mortgage

No more house, but debts left: What should IDPs and people on occupied territories do with mortgage

The military conflict has influenced the life of a lot of people, as well as their dwellings and other property left on the occupied territory. What to do with the property bought on credit or with collateral to get a loan from a bank? Journalists of “Donetsk Dialogue” (a program broadcast on Donbas public TV) interviewed IDPs who are still disturbed by credotors — banks and their collectors. The journalists found out that such actions are illegal. They also clarified what to do with the payment for utilities on the occupied territory.

Intrusive creditors


Telephone calls with credotors' threats do not make Tetyana happy. She left Donetsk when the military conflict was the most intensive as before 2014 nothing had portended any trouble.

Her family is an ordinary one. Tatyana is an experienced teacher, however, she could not afford tobuy a flat for cash in an industrial city. That is why,  in 2008, having scrupulously calculated their income, the family decided to buy a flat on credit for 20 years with a monthly payment of 900 Hryvnyas which they paid every month without delay.

There was a telephone call from the bank. They asked Tetyana to continue paying out the credit. She asked, “How? Banks in Donetsk are not working. Bank branches are closed; no job, no oportunity to go anywhere. So, I said that I can't pay. They said that I could ask my friends or acquaintances to pay for me, and I laughed in respond”, says Tetyana.

According to Tetyana, they did not offer her a credit vacation; the bank promised not to impose penalty, however, insisted on payment.

Forcing IDPs-borrowers from the ATO zone to pay their debts is illegal

Lawyers state that bank methods applied to IDPs or Ukrainians who are staying on the occupied territory are illegal.

“You may not pay the credit now if your financial situation is bad. Any calls from banks, collecting firms, or other organizations are illegal. More than that, they volate Ukrainian laws, including the Criminal Code of Ukraine”, says lawyer Tetyana Ivanova,

If the mortgaged property is on the occupied territory, banks have no right to claim to repay the loan until the situation has been settled down as, according to Ukrainian  laws, the ATO is force majeure.

“One should go to Ukrainian Chamber of Commerse and Industry and get a certificate of force-majeure. This certificate gives you the right not to repay the credit now. It reliefs from fulfilling credit contract duties for the period of forse-majoure. On the territory controlled by Ukraine it is called the ATO”, Tetyana explains.

The situation with IDP Tetyana is typical for residents of the Donetsk and Luhansk regions. They have become hostages of the war. However, in this situation, when they cannot repay, they are protected by law.

“The legislation was adopted and is in force which exempts people from their liabilities, fines, sanctions, penalties; and banks have no right to charge them. Moreover, credotors' pressure may be qualified as racket under Ukrainian legislation”.

“If there are calls, threats, demands to immediately pay the money back, go to law enforcement bodies as a crime is committed against you — it is racket”, Tetyana recommends.

What to do with payments for utilities on the occupied territory?

To pay or not to pay for utilities — lawyers have no clear answer. On the one hand, if services are provided, one shoild pay for them. On the other hand, the question arises whether it is legal.

“Organizations which are located on the occupied territory are dependant on terrorist and separatist organizations which occupied these territories, in fact, on armed criminal gangs. It is not known whether the money for utilities is spent on maintaining houses or on something else. It is a disputable question”, explains the lawyer, Tatyana Ivanova. That is why people on occupied territories should make the decision whether to pay or not by themselves.

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