Putin signs law to write off bad debts for those who fought in Ukraine

The new law will allow those who sign a one-year contract to fight in Ukraine after December 1 to have their existing bad debts written off. The law also applies to the spouses of those who sign up, the Russian government said on November 23.

The law will apply to debts that have been subject to a court order for collection and were subject to enforcement before December 1. The total amount of debt that can be written off is 10 million rubles, or about $96,000.

Russians under 30, of fighting age, would benefit most because they are the group most likely to take on debt. Russia has very high interest rates and many have almost no savings, despite a relatively high rate of home ownership.

Experts say the new law will be a powerful incentive for some to sign up to fight in Ukraine, as Russia looks for new ways to recruit in the nearly three-year-old conflict.

Political analyst Georgy Bovt wrote on Telegram that the Russian government is clearly “increasing incentives for people to sign contracts” to go to Ukraine to fight.

The law, he said, “offers another way out of the unaffordable credit burden for at least hundreds of thousands of people.”

According to a report released by the Central Bank of Russia last month, more than 13 million Russians have three or more loans, up 20% from the same period last year.

The average amount of money people with three or more loans pay back is about $13,400. Many people start with a bank loan, then apply for additional loans from microfinance institutions.

Russian soldiers fighting on the front lines are paid much higher than the national average.

Ukraine also has laws that allow combatants to enjoy preferential loan terms and in some cases debt forgiveness.

The Russia-Ukraine war broke out in February 2022 and shows no signs of ending. Both sides are increasing military pressure by using more powerful, longer-range weapons such as ATACMS missiles or Oreshnik ballistic missiles, raising concerns about the risk of the conflict being pushed closer to the threshold of nuclear war.