HOW TO RECOVER DEBT DURING WARTIME: COURT PRACTICE AND GUIDELINES FOR CREDITORS
The martial law introduced in Ukraine due to the full-scale armed aggression has significantly affected all spheres of public life, including the fulfillment of monetary obligations. Many businesses have lost the ability to operate in a standard mode, which has led to massive accumulation of debts. Under such circumstances, the issue of debt recovery becomes highly relevant and, at the same time, faces a number of legal, organizational, and practical challenges.
To highlight the key issues and available options for debt recovery, we begin a series of publications on this topic. The first article addresses the most common mechanism judicial debt recovery.
1. Legal framework for judicial debt recovery during martial law
Despite the introduction of martial law, the general provisions of civil and commercial legislation governing obligations and liability for non-performance remain in force. At the same time, certain aspects of court proceedings have undergone changes:
– According to communications issued by the Supreme Court and recommendations of the High Council of Justice, courts may take into account objective wartime circumstances when assessing evidence and applying procedural deadlines.
– The enforcement of court judgments may be complicated due to territorial restrictions, destruction of assets, or lack of enforcement officers in specific regions.
2. Pre-trial dispute resolution
Pre-trial settlement begins with sending a written demand to the debtor requesting repayment of the debt.
While the law does not always mandate a mandatory claim procedure, in commercial disputes it is often a prerequisite for recovering annual interest and penalty sanctions.
A demand letter should include:
– the amount of the debt and calculation thereof;
– reference to contractual provisions;
– a request for voluntary payment;
– a deadline for performance.
As an alternative to litigation, the parties may engage in negotiations and conclude a debt restructuring agreement. This approach saves time and costs and, more importantly, may preserve business relations between the parties.
3. Court proceedings and specifics of filing a claim during wartime
If negotiations fail, the creditor must file a claim for debt recovery.
Claims are filed with commercial courts (if both parties are legal entities or entrepreneurs) or with civil courts (if at least one party is an individual).
A strong evidentiary basis is crucial for successful judicial protection:
– primary documents (contracts, acts of acceptance, invoices);
– correspondence;
– bank statements, payment orders;
– reconciliation statements.
The case may be heard under simplified proceedings (if the claim is undisputed) or under general proceedings.
If the claim is granted, the court issues a judgment ordering payment of the debt and may additionally award penalties, inflationary losses, 3% annual interest, and legal costs.
Wartime realities create practical complications: limited physical access to courts, delays in case review, difficulty identifying the debtor’s location, and serving procedural documents. Under these conditions, electronic justice plays a significant role — filing claims through the “Electronic Court” system and participating in hearings via videoconference.
Absent debtors (especially individuals) often lead to default judgments, which may raise concerns regarding the effectiveness of protection of their rights, but allow creditors to exercise their right to judicial protection.
4. Enforcement of court judgments during wartime
Once the creditor obtains a final and enforceable judgment, the debtor has two options: voluntarily fulfill the obligation or face the initiation of enforcement proceedings, which may result in seizure and sale of assets, as well as an additional 10% enforcement fee.
The enforcement officer issues resolutions simultaneously regarding:
– initiation of enforcement proceedings;
– freezing of the debtor’s funds and assets;
– recovery of enforcement costs and the enforcement fee.
To ensure execution of the judgment, the enforcement officer may impose seizure on:
– funds in bank accounts;
– movable and immovable property;
– corporate rights.
Seizure prevents the debtor from disposing of assets. According to the Law of Ukraine “On Enforcement Proceedings,” seizure may be imposed either by resolution of the enforcement officer or by ruling of the court.
If the debtor refuses to comply voluntarily, property may be sold through the electronic auction system (SETAM). Proceeds from the sale are used to satisfy the debt.
However, enforcement during wartime is significantly complicated due to:
– territorial inaccessibility for enforcement officers;
– suspension of state institutions;
– loss or destruction of debtor’s property;
– legislative restrictions concerning enforcement actions against mobilized individuals or persons located in combat zones.
5. Court practice
Courts take wartime circumstances into account when adjudicating debt recovery disputes. In certain cases, force majeure is recognized as a ground for exemption from liability, although it does not extinguish the obligation itself. For example, commercial courts have rejected claims for penalty sanctions where the debtor proves that non-performance was caused directly by active hostilities.
However, courts do not consider the mere fact of war as sufficient grounds to avoid debt if no specific evidence is provided demonstrating that wartime conditions made performance impossible.
6. Conclusions and recommendations
Effective debt recovery requires a comprehensive approach. From pre-trial claim work through litigation and to the stage of compulsory enforcement, the creditor must act consistently and with legal support. Particular attention should be paid to asset seizure as a key tool for ensuring the actual enforcement of court judgments.
Under martial law, judicial debt recovery remains possible, although complicated. Creditors should:
– Use electronic justice mechanisms;
– Properly prepare evidence of the debt;
– Consider potential force majeure circumstances affecting the debtor;
– Use alternative dispute resolution mechanisms: mediation, restructuring, contractual debt write-off.
Contacting LBASE provides creditors with a substantial advantage in debt recovery matters. Our team has proven and effective legal algorithms — from pre-trial settlement to full enforcement of the court judgment. Through a systematic approach and deep understanding of judicial procedures, LBASE delivers real results even in complex, multi-level disputes.
29.10.2025
