After the adoption of Law No. 14005, which pertains to the simplification of enforcement proceedings through digitalization, concerns about the potential for automatic debt collection have spread in society. However, as experts note, these concerns are largely exaggerated.
This is reported by Finway
Main Changes: Digitalization and Property Protection
The Chair of the Council of Private Executors of Ukraine, Oksana Rusetska, clarified that the new draft law submitted for the President’s signature does not introduce any new strict measures against debtors. The main change lies in the digitalization and simplification of existing procedures, while the key conditions remain unchanged: entry into the Unified Register of Debtors occurs only in the presence of a court decision and an open enforcement proceeding.
From now on, after the full repayment of a debt, individuals will be automatically removed from the debtors’ register. This will significantly expedite citizens’ ability to manage their own property without delays that previously arose due to the slow process of removal from the register.
Mechanism of the Debtors’ Register and Myths About Automation
Oksana Rusetska emphasized that the changes will primarily concern small debt amounts, and that the law increases the level of protection for a single dwelling by raising the threshold for potential seizure. However, most sensational claims in the media about new restrictions do not correspond to reality.
“There is no complete automation of the debt collection process provided for by this law (on the simplification of enforcement proceedings through digitalization – ed.). In fact, the Unified Register of Debtors has been functioning in Ukraine since 2017. And the biggest myth that circulated around this draft law after its adoption was that people would now be automatically entered into this register. However, it is important to understand: this mechanism has been in place for many years. Since 2017, every individual or legal entity against whom an enforcement proceeding has been opened is automatically entered into the debtors’ register after the relevant procedural document is issued by the executor – whether private or state. As of today, this procedure remains unchanged. That is, regardless of the amount of the claim – whether it is a fine for an administrative offense (for example, a traffic violation or improper parking), or a debt for utility services, or a loan – from small to significant – if an enforcement proceeding is opened, the individual ends up in the debtors’ register. And from that moment, certain restrictions are imposed, particularly regarding the management of property. For example, an individual cannot independently sell a car or dispose of real estate – sell or gift it – as long as there are outstanding debt obligations. After the full repayment of the debt under the enforcement proceeding and the execution of the court decision, the proceeding is closed, and the person can again freely manage their property,” Rusetska explained.
Rusetska also emphasized that it is impossible to end up in the debtors’ register without a court decision or court order, even in the case of utility service debts. The procedure for entering the register occurs only after the opening of an enforcement proceeding in the established manner.
It is worth noting that the adopted law is part of the Eurointegration changes and meets the requirements of the Ukraine Facility Plan. Its goal is to ensure the rapid, modern, and transparent execution of court decisions through the digitalization of processes.