New draft law on debtors in Ukraine: whose property can be seized and how it will work

On November 4, 2025, the Verkhovna Rada of Ukraine passed in the first reading Draft Law No. 14005 “On Amendments to Certain Laws of Ukraine on Simplifying Enforcement Proceedings Through Digitalization.” The document sparked a significant public reaction—some consider it a progressive tool for creditor rights protection, while others see it as a threat to the constitutional rights of citizens. This analytical article will examine in detail what exactly this draft law changes, whose property and how it can be seized, and what risks exist for ordinary Ukrainians.

Essence of the Draft Law: Digitalization or Increased Pressure?
The official purpose of Draft Law No. 14005 is to digitalize enforcement proceedings, speed up debt collection, and ensure effective execution of court decisions. In practice, this means the creation of a single automated system that combines the Unified Debtor Register with state property registries, banks, notaries, MIA service centers, and other institutions.

The draft law provides for amendments to seven key Ukrainian laws, including “On Enforcement Proceedings,” “On Notaries,” “On Banks and Banking Activity,” “On Road Traffic,” “On State Registration of Real Property Rights,” among others. The principal innovation is the automatic blocking of debtor property without additional court orders, immediately after information is entered into the Unified Debtor Register.

How the New Collection System Will Work
Upon the enactment of Draft Law No. 14005, a fundamentally new model of forced enforcement of court decisions will operate:

• Automatic inclusion in the Unified Debtor Register. After the initiation of enforcement proceedings, information about the debtor is automatically entered into the UDR, which is integrated with all state registries.
• Instant blocking of transactions with property. As soon as one is entered into the register, the debtor loses the ability to dispose of their property—real estate, cars, shares, corporate rights, securities.
• Automatic arrest of bank accounts. Banks gain access to the UDR and block operations on the debtor’s accounts, including electronic money and payment services.
• Ban on notarial actions. Notaries cannot certify any agreement on the disposal or pledge of the debtor’s property—sale, gift, exchange, collateral become impossible.
• Blocking of vehicle registration. The Ministry of Internal Affairs will prohibit any registration actions with the debtor’s vehicles.
• Automatic lifting of restrictions after payment. After the debt is repaid, the system automatically notifies, removes the person from the UDR, and lifts all restrictions.

Who Is Subject to Automatic Collection
Draft Law No. 14005 applies to all categories of debtors, regardless of the type of debt:

• Debtors to banks and non-bank financial institutions;
• Debtors for utilities (heating, water supply, building maintenance);
• Debtors for alimony (after three months of non-payment automatically enter the register);
• Debtors by contracts between individuals;
• Debtors to condominium associations for building maintenance;
• Debtors under any other obligations confirmed by a court decision.

It is critical that the amount of debt does not matter for the application of automatic restrictions. Even debt of just a few hryvnias lands a person in the UDR, after which their accounts and property are automatically blocked.

Sole Housing: Can It Be Taken?
One of the most painful questions is whether sole housing can be taken for debts after the adoption of Draft Law No. 14005. The official position of authorities and lawyers is that the norms on the protection of sole housing remain unchanged.

Under current legislation, sole housing may be realized only if the amount of the debt exceeds 20 minimum wages (as of November 2025, about 160,000 UAH). If minors or disabled persons are registered in the home, forced sale is virtually impossible.

However, experts warn: the draft introduces mechanisms that make this norm formal. The debtor cannot sell or mortgage the apartment to pay off the debt because accounts will be blocked and the notary will not certify the transaction. The enforcer gets the right to independently determine the method of repayment, and as a result, even “untouchable” housing could end up on auction.

Some politicians and human rights defenders, including Batkivshchyna party leader Yulia Tymoshenko, claim that for the first time in Ukrainian history, the draft prescribes a procedure for depriving a person of sole housing contrary to the Civil Code. However, this claim is contested by other experts who emphasize that the basic rule on 20 minimum wages remains in effect.

Procedural Features and Powers of Enforcers
Draft Law No. 14005 significantly expands the powers of state and private enforcers:

• Access to all state databases. Enforcers receive online access to information about property, accounts, income, securities, and corporate rights of the debtor.
• Independent determination of collection method. The enforcer may independently decide which property to seize, what accounts to block, in what order to collect the debt.
• Seizure without a court decision. Seizure of property, account blocking, and restriction of transactions are applied automatically based on the enforcer’s order, without the need for a separate court decision.
• Detailed procedure. The draft prescribes clear deadlines for enforcement actions (within a day, three days, etc.), which minimizes the risk of corruption.

These provisions have provoked mixed assessments. On one hand, detailed regulation and automation genuinely reduce the risk of bribery. On the other hand, the lack of judicial control at the stage of applying restrictions creates a risk of abuse.

Criticism and Constitutional Risks
The draft law has encountered strong criticism from human rights defenders, lawyers, and some MPs:

• Violation of the constitutional right to property. Article 41 of the Constitution of Ukraine states: “No one may be unlawfully deprived of property. The right to private property is inviolable.” The draft allows automatic limitation of property rights without individual judicial assessment of the proportionality of such restrictions in each specific case.
• Lack of judicial control. Property seizure and account blocking are carried out without a separate court order, solely on the basis of the enforcer’s order. This essentially allows one to be “shut out” of economic life without real judicial review.
• Risk of errors and abuse. The automated system does not provide mechanisms for quickly appealing erroneous UDR entries. A mistake in the register could block legitimate property transactions.
• Opportunities for raiding. Experts warn that broad enforcer powers without proper oversight create a “gold mine for corruption” and raider property seizures.
• Lobbying for collectors’ interests. Attorney Rostyslav Kravets said that the draft is being pushed to enable the re-registration of debtor property for certain marginalized groups.

Special Cases: Utility Debts and War
A separate problem is utility debts during wartime. According to the Ministry for Communities Development, the issue of paying utilities for destroyed or damaged property is still unresolved.

If someone left an active combat zone, where life is unbearable, heating and building maintenance payments still need to be made. In temporarily occupied territories, debts accrued before occupation remain on the books. Draft Law No. 14005 contains no special provisions for debtors affected by war.

Timeframes and Prospect of Adoption
Draft Law No. 14005 has only passed the first reading. It is being prepared for second reading, where significant amendments are possible. Experts point to many procedural and substantive deficiencies in the document, hence its chances of adoption in its current form at second reading are considered low.

Parliamentary experts note that part of the draft’s provisions are aimed at restricting debtor rights, which are hardly directly related to digitalization of enforcement proceedings. This creates grounds for further improvement of the document.

Recommendations for Citizens
If Draft Law No. 14005 is passed, citizens should:

• Avoid accumulating debts, even minor ones;
• Make timely payments for utilities, credits, alimony;
• Monitor their information in the Unified Debtor Register;
• In case of erroneous entry—immediately contact the enforcer and court to appeal;
• Consult a lawyer before undertaking any property-related transactions;
• Keep documents confirming repayment of debts.

Conclusions
Draft Law No. 14005 is an attempt at a radical digital reform of enforcement proceedings in Ukraine. Its positive sides are automation of processes, reduced bureaucracy, minimized corruption risks, and accelerated collection. However, its negative sides—lack of judicial control, risk of violation of constitutional rights, and opportunities for abuse—cause serious concern among human rights activists and experts.

What the final text of the draft will be after the second reading is unknown. Lawyers emphasize that to avoid falling into a debt trap, one must work not only on legal mechanisms but also on legal and financial literacy of the population.

Author: Oleksandr Nakonechnyi – attorney, head of corporate and commercial law practice at the law firm WINNER.

If you have questions or problems related to enforcement proceedings, challenging actions of enforcers, protection from illegal collection, representation in debt cases, or consulting on the risks of being listed in the debtor registry—contact our team of professionals in enforcement and civil law.

The law firm WINNER offers:

• Expert advice on the consequences of Draft Law No. 14005;
• Analysis of your debt obligations and collection risks;
• Representation before enforcers and in court;
• Appeal of illegal actions by enforcers;
• Protection of your property from unlawful seizure;
• Support for real estate and other property transactions.

In a time of legal uncertainty, it is crucial to have a reliable legal partner to help protect your rights and interests. Contact us—we are ready to help you!