Fines, confiscation and eviction: What Servants of the People prepared for utilities debtors?

Author : Anna Peshkova

Source : 112 Ukraine

Ukrainians who do not pay for housing and utilities should not be fined during the lockdown and a month after it. But the Servant of the People MPs and the Ministry of Development of Communities and Territories suggest introducing new fines for non-payers
22:20, 22 June 2020

Open source

In their opinion, debtors for housing and utilities are no better than non-payers of alimony. They are offered to be deprived of traveling abroad, a driver’s license, and also of half of their wages. But for service providers, bill number 3613 involves bonuses only.

From love to hate

If at the end of February the total debt of Kyiv residents for utilities reached 32.7 billion hryvnias (1.2 billion USD), then by the end of April, debts had almost doubled - up to 63 billion (2.3 billion USD). For comparison, over the same time period last year, the total debt of Ukrainians reached 57 billion hryvnias (2.1 billion USD). Then the experts sounded the alarm and called what was happening a national disaster.

Generally, the decision to allow people not to pay for utilities was disliked by the communal services, which, in the absence of finance, had to pay salaries to their employees. The same ones worked in the previous mode and repaired the rotten pipes, realizing that their salaries could hang in the air.

Communal service organizations believe that the government has not clarified for the Ukrainians: they still have to pay everything that they did not pay. In their opinion, this was done specifically to gain political points. But somehow they need to repay the debt.

Now, when a warning letter about the debt arrives to the Ukrainian, he makes a decision: either pay it off or conclude an agreement on its restructuring. And only in case of ignoring all kinds of warnings shutdowns and penalties in court are possible.

According to the new initiative, the rules as a whole do not change. But a clear statement appears: it is necessary to pay or restructure the debt before October 1. Restructuring is possible for 5 years, regardless of the size of the debt and income of the debtor. But, in fact, it is unlimited: if the debt cannot be repaid during this period due to low incomes, the contract will be automatically extended. As before, 25% of the salary will be deducted from a working Ukrainian per month, and 20% from recipients of benefits.

It is important that, subject to the conclusion of a restructuring agreement, the debtor will retain its right to receive subsidies and other benefits. This is a positive thing, since earlier social protection authorities refused to grant subsidies if there was even a small debt.

A big bet is made on restructurization, although it is not the fact that this can improve payment discipline. Energy experts unanimously say that such a practice, on the contrary, can entail a process of increasing debt. But this is not the most important thing.

All the innovations of the initiative, in fact, lie in what will happen if you do not pay the debt or sign a restructuring agreement. With the new bill, more opportunities are opening up to force you to pay through the courts.

The authors indicate in an explanatory initiative that often enterprises do not try to seize the debtor's finances due to the high cost of the process. Now it is proposed that the plaintiffs should not pay the court fee at all. So the judiciary will obviously be inundated with such cases. Attorney Rostislav Kravets considers such an approach strange, because we are dealing with economic legal relations. For them, there is already a written order, in which, according to a simplified system, persons who provide housing and utilities can act. But for some reason it was necessary to provide them with additional benefits.

What awaits the deadbeat

Almost all the norms that were adopted in 2017 on non-payers of alimony are transferred to housing and utilities. If you do not pay a year, 20% of the fine will be added to the amount of debt, 2 years - 30%, for 3 years the debt will increase one and a half times. And this is without taking into account the penalty, which is accrued every day and can reach the amount of debt in volume. So in the worst case scenario, you will have to pay back almost three times the original amount. If your salary is delayed, there will be no penalty.

The most interesting thing is that the ban on charging and levying fines and penalties for late payment is valid during the quarantine period and for 30 days after its end. Most likely, MPs are optimistic that all quarantine restrictions will be lifted at least by September 1st. Otherwise, their fines simply will not work. But here it will be quite realistic to introduce other sanctions.

Related: MP from Servant of the People party advises pensioner to sell dog to pay for utilities

Finances will be automatically deducted from salaries, but not by 25%, as in the case of restructuring, but by 50%. The executive service will transfer the writ of execution to the employer. The authors of the initiative justify this innovation with justice in relation to those who paid for services even in quarantine.

But how the average Ukrainian will survive on minimal income per month is unknown. Therefore, it can be predicted that due to such a norm more people will go into the “shadow”. Then their income cannot be proved.

For senior citizens and students, the rates are the same - 20%.

If a person is not paid a salary, he may lose property, possibility of traveling abroad, using a firearm, hunting, pneumatic weapons, or hunt.

What debt should be in order to get sanctioned is not yet known. It will be decided by the Cabinet. Which in itself is very controversial, because in this case we will again encounter manual control. Conditionally: today we can talk about 100 000 hryvnias, and tomorrow - about 10. Lawyers say that such changes in laws are extremely dangerous.

As for the confiscation rule, it can be used if you do not pay more than three months. Even if your utility payment is only a thousand hryvnias.

The practice of confiscation existed before. According to the lawyer Yuri Belous, the seizure comes only when there are no deposits in the bank, cash, salary. If a person does not officially work, then they can withdraw his vehicle, any movable property, household appliances. It is still unknown whether to wait for the confiscation of pets, but in other cases this practice is being used more and more actively.

They cannot confiscate dishes, bedding, hygiene products, clothes, and children's clothes. There is a list of furniture and appliances that should remain for the family: a table, refrigerator, TV, computer, mobile phone, bed and chair per person. And only last but not least, land, summer houses can be confiscated.

Collecting a debtor's only home is generally illegal. True, the practice in Ukraine is completely different: due to a debt of 50 000 hryvnias (1852 USD), a resident of Lutsk was left without housing. Guardianship authorities may also become an obstacle to confiscation of housing if underage children are registered in the apartment.

If we talk about ban on travel abroad, then practice shows that with respect to alimony it really works. But it’s not a fact that this norm is to “squeeze out” debts from housing and utilities from Ukrainians. Usually their holders cannot financially afford travel.

Lawyers agree that restructuring is really a good option for a debtor. But what to do those Ukrainians who accrued fictitious debts? After all, the obligation to formalize the restructuring comes even without a court decision. It turns out that one cannot fail to pay for the debt, regardless of whether it is justified or not. Otherwise he will have ban on going abroad and gigantic fines, which will be deducted automatically.

The practice of calculating fictitious debts in Ukraine has recently become more frequent. Residents are informed that during the design of the house incorrect calculations were made, and now they need to pay additional money for heating. The house is not new - it was designed in the middle of the last century, but the error was "noticed" only now. Or they just send paychecks with big amounts. This happens despite the fact that the order of additional charges for previous periods does not exist. According to the civil code, the government, and not the consumers, must repay such financial losses.

Theoretically, debts can be tried to challenge. If there is a problem, you can write a complaint to the regulator. In situation with the utility company - go to the help desk in the regional or district councils. But to challenge debts out of court is quite difficult, because the customer service centers are open from 9:00 to 18:00.

If the amount of the debt is significant, and there is no progress on its cancellation, the only option is to sue. The costs in case of your victory will be paid by the supplier. Nevertheless, Ukrainians rarely dispute debts, because when accruing 3 000 hryvnias, it’s simply impractical to hire a lawyer for 15 000. So, first of all, law-abiding, but limited in terms of means citizens can suffer from a new initiative. It is from them that it will be easiest to collect additional charges.

It is interesting that all the antisocial reforms that are being introduced in Ukraine, whether it is a veiled increase in the retirement age, or, as now, the elimination of housing and communal services debts, are justified by the requirement of a memorandum between Ukraine and the IMF. However, such motivation is manipulation.

Who really needs this law

Indeed, the requirements for improving payment discipline have been voiced by Western partners since 2006. However, in addition to controlling payments, the memorandum also prescribed that the tariffs of heat supply organizations should be brought to economic feasibility. If we look at the structure of housing and communal services debts, then the debts are huge.

The very fact of the presence of such debts suggests that the price model is anti-market, does not correspond to solvent demand. People are artificially driven into a situation where they are forced to avoid paying. However, it is still unclear how these tariffs are set: the Cabinet of Ministers cannot publicly present the exact scheme. In fact, tariffs can rise to heaven, and consumers will be required to pay them silently. So maybe it would be worth starting with their validity, and not with the next “whip” for the population?

Kravets believes that such selectivity is not justified. In his opinion, the bill is submitted to parliament in the interests of business entities that own management companies and provide exclusive services. It is also alarming that, in essence, the bill is ministerial, but three MPs filed it. That is, they artificially conducted it without coordination with the Ministry of Finance.

“In my opinion, 90% of these debts are invented. Tariffs are constantly questioned. Those established in Kyiv were declared illegal without any documents or justifications. But no one bears responsibility for this, just like for timely cleaning, repairs at the entrances, garbage collection, quality of drinking water, its temperature, because our batteries are clogged and the temperature does not correspond to that declared in the apartments. So far there has not been a single bill that would establish the duty and responsibility of persons who provide services," says the lawyer Rostislav Kravets.

However, this is far from the first initiative, because of which consumers of public utilities are in a much more vulnerable position than suppliers. In the first reading, a bill was passed according to which any employee of public utilities can forcefully enter the debtor’s housing and turn off the electricity, put a plug on the gas tap.

But not everything is so hopeless. Political scientists and economists believe that a new bill will not be adopted, given the fragmentation in the Servant of the People party and the need to gain political points before the local elections. Most likely, consultations with the public will be needed. And it’s easy to predict what the discussions will lead to during the crisis.

Related: Government does not fulfill Zelensky’s promise to cancel utility bills for people over 70 years old

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