Ukraine adopted a law allowing individuals to fully write off or restructure debts for five years under insolvency procedures
Executive summary
Ukraine enacted wide-ranging insolvency and restructuring reforms in 2024–2025 that created preventive restructuring mechanisms for businesses and introduced suspension powers on certain sovereign external payments while it negotiated large sovereign debt exchanges; the government completed a $20.5 billion eurobond restructuring that cut principal by about 37% (reducing the stock by roughly $8.5–$9bn) and is separately negotiating or suspending $2.6bn of GDP‑linked warrants [1] [2] [3] [4]. Available sources do not mention a single, across‑the‑board law that lets “individuals fully write off or restructure debts for five years” as stated in the query — instead the reforms create targeted preventive restructuring procedures for businesses, temporary moratoria on certain sovereign payments, and specific protections for individual debtors under conditions tied to martial law and other rules [5] [6] [7].
1. What the new insolvency framework actually does: a targeted “second chance” for businesses
Parliament adopted reforms implementing a European‑style preventive restructuring mechanism intended for businesses with temporary distress; the law (Law No. 10143) requires a court‑based plan, creditor classification, and a protective stay so debtors can negotiate and reorganise without immediate creditor enforcement — advantages include shorter timelines and lower costs aimed at keeping viable firms afloat [6] [5]. These changes align with EU Directive 2019/1023 reforms Ukraine introduced in 2025, but they are structured for companies and entrepreneurs, not a blanket amnesty for individual consumers [8] [6].
2. Individual debt relief: limited, conditional measures — not universal five‑year write‑offs
The expert guide and government reporting note special protections for individual debtors limited in scope: until 18 October 2023 there were transitional rules for restructuring foreign‑currency loans and mortgages, and under martial law (and for six months after its end) courts may refuse proceedings where military action caused the debtor’s inability to pay [5]. Restructuring plans for small residential mortgaged properties are specified (longer terms, capped interest indices), but none of the cited sources describe a universal five‑year write‑off power that individuals can invoke unconditionally [5].
3. Sovereign debt moves are a separate track: moratoria and a landmark eurobond haircut
Separately from domestic insolvency reforms, the government used temporary suspension powers to pause external sovereign payments while negotiating with creditors. Parliament authorised suspension of some external payments in mid‑2024, and the Finance Ministry then executed a eurobond exchange converting $20.5bn of bonds into fewer instruments with an upfront ~37% principal haircut, reducing the state’s debt stock by about $8.5–$9bn and cutting near‑term debt service by large amounts consistent with IMF programme targets [7] [1] [2] [3].
4. GDP‑linked warrants and remaining controversy: $2.6bn unresolved
A distinct set of instruments — GDP‑linked warrants issued in 2015 — have proven a sticking point. Talks to restructure roughly $2.6bn of these warrants have stalled or been suspended; holders pushed back on Ukraine’s proposals, and a moratorium has been used to suspend payments while negotiations continue. Reuters and OMFIF reporting show creditor groups delaying decisions and a second vote scheduled in December 2025 for some holders [9] [4] [10]. That saga highlights that not all debt relief has been uniform or uncontroversial [4] [10].
5. Why confusion arises: overlapping instruments, emergency rules, and wartime exceptions
Public understanding is muddled because several distinct legal tracks operate in parallel: (a) domestic insolvency code reforms and preventive restructuring for businesses; (b) wartime exceptions and court‑refusal rules tied to martial law; and (c) sovereign payment suspensions and bespoke exchanges with international creditors. Press reports often conflate these measures into a single narrative of mass forgiveness for individuals, but the cited legal and advisory sources separate business preventive restructuring from sovereign negotiations and from limited consumer protections [5] [6] [1].
6. What the sources don’t say — and why that matters
Available sources do not mention a law that grants every individual citizen the unconditional right to fully write off or restructure personal debts for five years; instead they document targeted measures for small mortgages, temporary court protections tied to wartime conditions, and corporate preventive restructuring procedures [5] [6] [8]. Because the debt policy landscape includes international creditor negotiations and IMF‑conditioned programmes, any broader consumer‑level write‑off would likely be explicitly reported and tied to budgetary and IMF implications — that reporting is not present in the materials provided [2] [11].
7. Bottom line for readers: limited, conditional relief — check the legal small print
Ukraine’s recent reforms and sovereign deals deliver substantial debt relief at the state level and introduce useful preventive restructuring options for businesses, and there are discrete protections for some individual debtors under wartime rules and mortgage provisions. But the claim that individuals can universally write off or restructure debts for five years is not supported in the cited reporting; readers should treat such broad claims with skepticism and consult the specific laws and Ministry of Justice guidance cited in official documents for precise eligibility and procedures [6] [5] [2].