Restrictions in Debt Restructuring: The Ministry of Justice Clarifies Which Debts Cannot Be Written Off

Debt restructuring is a financial settlement tool that allows a debtor and creditor to agree on new, mutually acceptable repayment terms during periods of economic instability.

A debt restructuring plan may include provisions for:

• the sale of part of the debtor’s assets during the restructuring procedure, including pledged assets, with a defined procedure, priority, timeline for sale, and projected proceeds;
• revision of the terms of financial obligations, including changes to the repayment schedule, method, or total amount of debt;
• the use of deferral mechanisms, installment repayment, or partial/full write-off of debt obligations;
• the involvement of third parties in fulfilling the debtor's obligations, including through surety agreements, guarantees, or other legal instruments provided under civil law;
• the implementation of additional measures to stabilize the debtor’s financial situation and protect creditor interests — including professional retraining, employment, or other socio-economic initiatives.

At the same time, certain debts are not subject to restructuring, including debts related to:

• payment of alimony;
• compensation for damages caused by a criminal offense, injury, other health damage, or death of an individual;
• payment of the unified social contribution for mandatory state social insurance;
• payment of other mandatory contributions for mandatory state social insurance.

Experts from the Eastern Interregional Department of the Ministry of Justice noted that tax debt incurred within three years prior to the date of the court decision to initiate insolvency proceedings is considered irrecoverable and may be written off during the debt restructuring process.