Businesses with loans after 2022: bankruptcy as a tool, not a verdict
Bankruptcy is a procedure set out in the Code of Ukraine on Bankruptcy Procedures, not a verdict for the owner. The biggest risk for a company director is not the procedure itself but delaying it.
The duty to apply to court
If satisfying the claims of one or more creditors would make it impossible to fully meet the debtor's monetary obligations to other creditors, the debtor must apply to the commercial court within one month to open bankruptcy proceedings (Article 34(6) of the Code).
If this requirement is breached, the debtor's director bears joint and several liability for the creditors' unsatisfied claims (ibid.). Waiting for things to "blow over" is a personal risk for the director.
What martial law has changed
Law No. 3249-IX of 13 July 2023 added item 1-6 to the Final and Transitional Provisions of the Code (in force since 29 July 2023). During martial law and for six months after it ends, the court refuses to open proceedings on a creditor's application if, before the preparatory hearing, the debtor proves one of the following:
- the debtor is entered in the electronic register of participants and contractors for state contracts and has a valid defence contract;
- the creditor's claims were not satisfied because of the armed aggression, in particular because the debtor's integral property complex is located in combat zones or temporarily occupied territories.
This rule applies specifically to creditors' applications and only under these conditions, which the debtor must prove.
Court practice this year stresses that martial law, loss of assets or unprofitability alone are not enough to apply this rule. There must be a causal link to the failure to perform the specific obligation in dispute (ruling of 26 March 2026 in case No. 925/843/25).
The options
- Rehabilitation (sanatsiia) — a procedure aimed at restoring the debtor's solvency.
- Liquidation procedure — after the debtor is declared bankrupt. From that day, arrests of the debtor's property are lifted and new ones are not allowed (Article 59(1) of the Code).
- Liquidation of a legal entity without bankruptcy — a separate route worth assessing alongside the two above.
Where to start
With an analysis, not a lawsuit: what the debts are, what property there is, and which contracts and court cases already exist. This determines which route is safe for you as an owner or director.