Will assets be seized to cover debts? What the new law actually means and how it will work

The media has been flooded with alarming reports that Ukraine is allegedly set to begin massively freezing bank accounts and seizing property even for minor debts. This follows the Verkhovna Rada’s endorsement of Bill No. 14005, which is already being called one of the most controversial pieces of legislation in the field of enforcement proceedings.

However, is this really a case of “mass seizure of property,” and to what extent does it comply with the law? Let’s examine this from a legal perspective.

What does Bill No. 14005 change?

The main focus of these reforms is the digitization of the debt collection process. The law provides for automatic interaction between the Unified Register of Debtors, banks, and government registries.

In practice, this means that once a person is entered into the register of debtors:

• Accounts may be frozen immediately;
• Restrictions are imposed on the disposal of property;
• The sale or transfer of real estate or vehicles becomes more difficult.

At the same time, it is important to understand that the law does not introduce new grounds for enforcement, but merely changes the mechanism for implementing existing procedures.

Can they seize property without a court order?

One of the main points that raises the most concern is the possibility of seizing property “without a trial.”

From a legal standpoint, this is not accurate.

Forcible seizure of property is possible only:

• pursuant to a court decision or other enforceable document;
• within the framework of ongoing enforcement proceedings;
• in accordance with the established procedure.

In other words, even after the amendments are adopted, the key principle remains unchanged: property cannot be seized without a proper legal basis.

Can they take away my only home?

The issue of a primary residence is traditionally the most sensitive.

Ukrainian law imposes restrictions on the seizure of a debtor’s primary residence. As a rule, such a measure is applied only in cases of significant debt and through a specific procedure.

Thus, the claim that a primary residence can be automatically sold to cover any debt is an exaggeration.

As it was before

Before the bill was passed, the enforcement procedure was significantly slower:

• accounts and assets were frozen through separate court orders;
• information sharing between agencies was partly done manually;
• debtors had more opportunities to evade their obligations.

The new rules effectively close these “loopholes” by automating the processes.

What rights does the debtor retain?

Despite the tightening of control mechanisms, the basic guarantees remain unchanged.

In particular, the protection of citizens’ rights is ensured by:

• Article 41 of the Constitution of Ukraine — the right to property is inviolable;
• The Law of Ukraine “On Enforcement Proceedings” — defines clear limits on the actions of enforcement officers;
• The procedural codes — guarantee the right to judicial protection;
• The possibility of challenging the actions of an enforcement officer in court.

In addition, once the debt is repaid, the restrictions are to be lifted.

Bill No. 14005 does not create new grounds for the seizure of property, but it significantly changes the speed and efficiency of debt collection.

In essence, this involves a transition to a system where:

• debts become more manageable;
• restrictions are imposed more quickly;
• opportunities to avoid liability are reduced.

At the same time, key legal safeguards—the requirement for a legal basis, a court ruling, and the ability to defend one’s rights—remain in effect.

If you have any questions or need legal advice, please contact the attorneys at Strategic Advocacy LLP.