PrivatBank granted a Kyiv resident a loan of $26,072, but he seeks to reduce the debt amount – a decision has been made by the court.

A man received a loan of $26,072 from PrivatBank for consumer purposes. However, he is dissatisfied with the restructuring of his loan obligations and requests the financial institution to reduce the total amount of his debt. This is stated in the decision of the Pechersk District Court of Kyiv, published on December 5, 2024.

On September 12, 2008, a loan agreement was concluded between the man and JSC KB "PrivatBank," the successor of which is JSC KB "PrivatBank," for a loan of $26,072 for consumer purposes, as well as $4,836 for insurance payments, with interest for the use of the loan payable until September 12, 2023. On May 12, 2021, he applied to the bank for restructuring the obligations under the loan agreement dated September 12, 2008. Following the review of the application for restructuring the obligations under the loan agreement dated September 12, 2008, he received a letter from JSC KB "PrivatBank" on October 27, 2021, which approved the submitted application for restructuring and provided a new payment schedule. However, this letter dated October 27, 2021, contains a debt amount of 295,340 hryvnias, which is deemed unjustified, lacking detailed calculations of the debt regarding payments and allocations for the principal, interest, penalties, and fees for the financial instrument, payment history, account statements, and is considered incorrect. In light of this, the citizen requests the court to reduce the total amount of debt under the loan agreement dated September 12, 2008.

"The plaintiff submitted a written request and application to JSC KB 'PrivatBank' for restructuring under the loan agreement dated September 12, 2008, which was first received by the bank on May 11, 2021. Subsequently, the application was supplemented with the necessary documents in accordance with the Law. Based on the review of the application, the bank amended the obligations under the loan agreement in accordance with the requirements of the Law of Ukraine 'On Amendments to Certain Legislative Acts of Ukraine Regarding Consumer Loans Provided in Foreign Currency' dated April 13, 2021, by conducting restructuring. On October 27, 2021, JSC KB 'PrivatBank' sent the applicant information about the changes in obligations as a result of the restructuring under the loan agreement dated September 12, 2008, and provided a new payment schedule, as required by paragraph 12 of section IV 'Final and Transitional Provisions' of the Law of Ukraine 'On Consumer Lending.' The information regarding the changes in obligations as a result of the restructuring of loan agreements issued in foreign currency should not include calculations of the debt amounts that existed prior to such restructuring, which is evident from the analysis of the provisions of paragraph 7 of section IV 'Final and Transitional Provisions' of the Law of Ukraine 'On Consumer Lending' No. 1381-IX dated April 13, 2021. Since the bank first received the plaintiff's written request on May 11, 2021, the date of the restructuring is considered May 11, 2021. Thus, the calculation and the proposed amount of debt are appropriate," stated PrivatBank.

Case Review

The court found that before the restructuring, the man's debt on the principal amount of the loan was $22,568, which consisted of $10,123 in current principal debt and $12,444 in overdue principal debt as of May 11, 2021. Therefore, the representative of PrivatBank indicated that from the date of the loan agreement until the day before the restructuring, that is, from September 12, 2008, to May 11, 2021, a total of 4,505 hryvnias was paid in penalties (according to paragraphs 5.1 and 8.5 of the Loan Agreement, penalties are paid in hryvnias).

As of the date of restructuring, according to NBU data, 1 dollar equaled 27.7641 hryvnias. Thus, the amount of penalties paid by the borrower that should be credited to the repayment of the loan amount in dollar currency (the currency of the loan agreement) is: 4,505.02 UAH / 27.7641 UAH = $162.26. Additionally, the recognition of penalties accrued as of the date of restructuring is ceased, as reflected in the 13th column of the debt calculation as of May 11, 2021, and in the UIRD calculation.

According to the provided debt calculations, the amount of debt on interest as of the date of restructuring was $18,742. This is the amount by which the interest debt for the use of the loan was reduced, which is also evident in the account statement. Thus, based on the UIRD interest rates in dollars from the time of the loan agreement until the date of restructuring, the accrued interest for the use of borrowed funds amounts to $17,450, as shown in the UIRD calculation. During the same period, from the conclusion of the loan agreement to the date of restructuring, the man paid interest on the loan totaling $21,746, as reflected in the 10th column of the debt calculation as of May 11, 2021.

Therefore, applying the specified UIRD rates in the respective foreign currency, which are lower than those established in the loan agreement, the bank calculated the UIRD, resulting in an excess interest amount of $4,295, which was accounted for in repayment of the principal amount of the loan ($21,746 in paid interest - $17,450 in accrued interest at UIRD rates). The average exchange rate of the hryvnia to the dollar as of the date of restructuring was 16.3082 UAH per 1 dollar ((4.8523 UAH + 27.7641 UAH)/2). Commission: paragraph 7 of section IV does not provide for actions concerning the recalculation of paid commission fees and their crediting to the principal or interest, hence the commission accrued as of the date of restructuring is subject only to write-off, which was done by the bank and reflected in the 17th column of the debt calculation as of May 11, 2021, and confirmed by the account statement.

In summary: the amount subject to restructuring was $18,109 ($22,568 total principal amount - $162 credited to the repayment of the principal loan amount - $4,295 credited from the paid interest at UIRD rates). At the same time, the debt on the accrued commission, penalties, and interest calculated up to the date of restructuring at UIRD rates was written off. Subsequently, to determine the debt amount in hryvnias, the dollar amount must be converted at the average rate of 16.3082 per 1 dollar: $18,109 * 16.3082 UAH = 295,340 UAH. The specified amount and the sum of the monetary obligation after the restructuring calculation are confirmed by the account statement and the debt calculation after the restructuring.

What penalty did the court choose?

The court denied the man's claim. His request to reduce the debt amount, which was altered after the restructuring of the borrower's obligations under the loan agreement, is not provided for by current legislation as a means of protecting rights.

"In filing the claim, the plaintiff sought to reduce the debt amount, changed after the restructuring of the obligations under the loan agreement from 295,340 hryvnias to 0 hryvnias. Thus, the plaintiff's request to reduce the debt amount, modified after the restructuring of the borrower's obligations under the loan agreement, is not stipulated by current legislation as a means of protecting rights. Therefore, after examining the case materials, the court concluded that the plaintiff did not sufficiently prove the circumstances indicating that as of the day of the case review, there were grounds for satisfying the claims, considering that the plaintiff mistakenly chose the means of protection. Based on the stated grounds, the plaintiff's claims are unfounded and therefore cannot be satisfied," the court emphasized.