What to Do About a Loan During Wartime: Borrower Rights and Legal Options

BlogLoan LawyerWhat to Do About a Loan During Wartime: Borrower Rights and Legal Options

After the start of the full-scale war, many borrowers lost their income, housing, job, or the ability to make loan payments on time. But martial law does not mean that the debt automatically disappears. At the same time, the creditor cannot charge any amounts without limits.

The debtor’s task is to check the structure of the debt, the legality of the charges, and choose a realistic way to settle the matter: restructuring, credit holidays, write-off of fines and penalties, or a special procedure regarding property destroyed by the war. The sooner this is done, the lower the risk of signing an unfavorable agreement, missing a court deadline, or agreeing to an incorrect amount.

What to do with a loan during the war

In short, during the war you should not do with a loan “what collectors say,” but what complies with the law and your actual financial situation. First, you should obtain a full debt calculation, then separate the principal amount of the loan from interest, fines, penalties, and commissions, and only after that request restructuring, credit holidays, or the write-off of illegal charges.

Procedure:

Find the loan agreement, payment schedule, and all additional agreements.
Ask the creditor for a written debt calculation.
Check whether the amount includes fines, penalties, or other payments for late payment.
Assess whether you can pay now and in what amount.
Submit an application for restructuring, credit holidays, or write-off of sanctions.
If you are a servicemember, attach documents confirming your status.
If the property under the loan has been destroyed or damaged by the war, collect confirmation.
In case of collector threats, record calls and messages and file a complaint.

Do you need to pay a loan during the war?

The general rule is this: a loan during the war must be repaid if there is no special benefit, creditor decision on write-off, or legal procedure that changes the borrower’s obligation. The principal amount of the loan, that is, the money actually received, usually does not disappear.

But this does not mean that you should automatically agree to any amount shown by a bank, MFI, or collector. The debt may include interest, commissions, fines, penalties, collection costs, or payments with unclear names. Some of these amounts may be disputed, especially if they were charged after February 24, 2022, as liability for late payment.

If you can pay according to the schedule, it is better to continue. If not, submit a written application to the creditor. This will show that you are not avoiding payment, but are requesting a lawful way to settle the issue.

What happens if you do not pay a loan during the war

If you do not pay a loan and do not contact the creditor, the debt may become overdue. The creditor may send demands, transfer the debt to collectors, sell the claim to another company, or go to court. After a court decision, enforcement proceedings, seizure of accounts, or seizure of property within the law may follow.

Even if there is overdue debt, the debt structure must be checked: the principal amount of the loan, interest, fines, penalties, and commissions. Be especially careful with “profitable” restructuring: it may reduce the payment, but fix an inflated debt amount.

What changed for borrowers after February 24, 2022

After February 24, 2022, special wartime rules appeared for borrowers. They do not cancel loans for everyone, but they limit certain charges and provide additional protection mechanisms.

The most important point is the restriction on fines, penalties, and other payments for late payment under consumer loans. If such amounts were charged during the period of martial law, they must be checked separately. Often, these very payments significantly increase the debt.

Special rules also apply to loans related to destroyed or damaged property, and separate benefits apply to servicemembers. But in each case, documents, an application, and a review of the agreement are required.

Fines and penalties during martial law

A fine and a penalty are liability for late payment, not the loan amount itself. It is precisely these sanctions that are subject to special restrictions during martial law. Therefore, if the creditor has included them in the debt, you need to demand a breakdown: for what period, at what rate, and on what basis they were charged.

Sometimes sanctions are disguised under other names: “late payment commission,” “debt servicing fee,” or “collection costs.” It is important to look at the essence of the payment: if it is a punishment for late payment, it can be challenged.

Loan interest during the war

Loan interest can usually still be charged during the war if there is no special benefit or separate agreement with the creditor. Therefore, credit holidays do not always mean that the debt does not grow. This must be checked especially carefully under MFI agreements and credit cards, where interest may exceed the principal amount of the loan. Often, this is only a postponement of payments to the future.

Exceptions are possible for servicemembers and in cases involving destroyed or damaged collateral property. But the documents, type of loan, and borrower status must be checked.

Table: what may be charged under a loan during the war

Before making a payment, it is worth checking what exactly the debt consists of: the principal amount of the loan, interest, fines, penalties, or additional commissions. Not all of these charges have the same legal regime during the war.

Type of payment	Can it be charged?	What to check
Principal amount of the loan	Usually yes	The amount of funds actually received and the remaining debt
Interest	Usually yes, except for separate benefits	Rate, period, borrower status
Fine	Subject to special restrictions	Whether it was charged after 24.02.2022
Penalty	Subject to special restrictions	Whether it is included in the total debt
Commissions	Depends on the agreement and the law	Whether they are provided for by the agreement and do not duplicate a fine
Collection costs	Their legality must be checked	Whether there is a basis and confirmation

You need to check not only the total amount, but each of its elements. This is often where it becomes clear that part of the debt can be reduced or challenged.

What to do if you have no money to pay the loan

If there is no money, you should not take out a new loan to repay the old one. This often creates a debt spiral, especially with MFIs. It is better to immediately contact the creditor in writing and explain the situation.

In the application, indicate the agreement number, the reason for the financial difficulties, the desired settlement option, and a request to provide a debt calculation. Attach documents about job loss, IDP status, military service, treatment, or property damage, if available. Do not agree to a schedule that you will not be able to follow.

Credit holidays during the war

Credit holidays are a pause or temporary reduction of payments. They can help if financial difficulties are short-term: salary delay, relocation, job loss, treatment, or evacuation.

But credit holidays do not always mean debt write-off. You need to clarify what exactly is being postponed: the principal amount of the loan, interest, or the entire payment. It is also important to understand whether the total overpayment will increase after the holiday period ends.

Before agreeing, request written terms: the duration of the holidays, the new schedule, interest, impact on credit history, and the amount after the grace period.

Table: credit holidays, restructuring, write-off — what is the difference?

These options are often confused, but they work differently. One provides a temporary pause, another changes the payment schedule, and write-off may reduce the debt amount itself.

Option	What it means	When it is suitable	Main risk
Credit holidays	Temporary pause or reduction of payments	Short-term financial difficulties	The debt may increase
Restructuring	Change of agreement terms or payment schedule	Long-term decrease in income	The total overpayment may increase
Write-off of fines and penalties	Removal of unlawful sanctions	If fines were charged during martial law	The creditor may not do this without an application
Loan write-off for destroyed property	Cancellation or special procedure regarding collateral property	Mortgage or car loan, property destroyed by the war	Strict conditions and documents are required
Individual bankruptcy	Court insolvency procedure	Large debts, no real ability to pay	A long and complex procedure

Loan benefits for servicemembers

Separate loan benefits apply to servicemembers. In certain cases, they may concern interest, fines, and penalties. Protection may also extend to the servicemember’s wife or husband if the legal conditions are met.

To use the benefit, it is not enough to simply notify the creditor by phone — documents must be submitted. This may be a certificate from the military unit, a mobilization document, an ID, or another confirmation of status. The application should also include a request to recalculate the debt and remove charges that should not apply.

Not every loan automatically falls under the benefit in full. Mortgages, car loans, and agreements with special terms should be checked separately.

What to do with an MFI loan during the war

MFI loans during the war require special attention because a small loan can quickly increase due to interest, rollovers, and additional payments. First, you need to obtain the agreement, loan passport, payment history, and debt calculation.

Next, separate the principal amount of the loan from all charges. If you received UAH 5,000 and are being asked to pay several times more, check the interest, fines, penalties, and commissions. Do not close one microloan with another: it is better to request debt fixation, restructuring, or write-off of sanctions.

Collectors during the war: what to do if they threaten you

Collectors may inform you about the debt and offer settlement, but they cannot threaten, blackmail, mislead, humiliate, call uncontrollably, or pretend to be a court or enforcement service.

If you are threatened, do not engage in emotional negotiations. Record the date, number, and company name, and save SMS messages and other messages. Demand written confirmation of the debt amount and the right of claim. If collectors’ actions go beyond the law, it is worth separately checking what is allowed and what is a violation and, if necessary, seeking protection from collectors.

Can a loan be written off during the war?

A loan cannot always be written off during the war. There is no general rule under which all loans are canceled because of martial law. But there are situations where the debt can be reduced or partially written off.

Most often, this concerns the write-off of fines, penalties, and other late-payment charges. Recalculation is also possible for servicemembers if the creditor incorrectly charged interest or sanctions.

A separate area is loans secured by property that has been destroyed or damaged by the war. Here, confirmation of ownership, the agreement, data on damage or destruction, and an application to the creditor are required. If the creditor agrees to write off part of the debt by agreement, put this in writing before making payment.

What documents to prepare before contacting a bank or lawyer

Prepare a checklist:

loan agreement;
loan passport;
payment schedule;
additional agreements;
payment statement;
current debt calculation;
correspondence with the bank, MFI, or collectors;
payment receipts;
documents on transfer of the debt to a new creditor;
certificate of income or job loss;
IDP documents, if available;
documents on military service;
documents on damaged or destroyed property;
court documents, if a lawsuit already exists;
enforcement officer’s resolutions, if proceedings have been opened;
screenshots, call recordings, or messages with threats.

If some documents are missing, they can be requested or restored. Do not agree with the debt amount until you see its structure.

Typical mistakes borrowers make during the war

Even if the loan situation is difficult, it is important not to act chaotically. Often, the debt increases or goes to court not only because of late payment, but also because of the borrower’s own wrong decisions.

Ignoring the creditor. Silence does not stop the debt and does not protect against court or transfer of the case to collectors.
Paying without checking the amount. If you do not understand the structure of the debt, you may pay disputed fines or penalties instead of the principal loan amount.
Signing restructuring without analysis. A new schedule may look convenient, but in fact fix an inflated debt amount.
Taking new loans to close old ones. This often only increases the number of creditors and makes the situation more complicated.
Making verbal agreements with collectors. All write-off, discount, or installment terms must be recorded in writing.
Not responding to court documents. If you miss the court stage, it will later be more difficult to reduce the debt amount or challenge the charges.

When you should contact a lawyer

You should contact a lawyer if the debt amount is unclear, the creditor has included fines and penalties, an MFI demands an amount several times higher than the amount received, collectors threaten you, the bank offers questionable restructuring, or court documents already exist.

Legal assistance is also needed by servicemembers and borrowers whose collateral property was destroyed or damaged by the war.

If you do not understand what exactly has been charged on your loan during the war, you should not act blindly. A loan lawyer will help check the agreement, debt calculation, legality of fines and penalties, and prepare an appeal to the bank, MFI, or NBU.

Frequently asked questions — short answers

Can I not pay a loan during martial law?

There is no automatic right not to pay a loan. But you can request restructuring, credit holidays, or write-off of unlawful charges.

Are fines and penalties charged on a loan during the war?

Fines and penalties are subject to special restrictions. If they were charged after 24.02.2022, the basis must be checked and a recalculation requested.

Is loan interest charged during the war?

Usually yes, if there is no benefit or separate agreement. War itself does not cancel interest for everyone.

Can a bank sue during the war?

Yes, it can. Therefore, court documents must be received, read, and objections must be filed on time.

Can collectors call during the war?

They can, but only within the law. Threats, blackmail, humiliation, and pressure on relatives are grounds for a complaint.

Can a loan be written off if housing was destroyed because of the war?

In certain cases, it is possible to request a special procedure or debt cancellation. Documents on the loan, the property, and the fact of destruction are required.