Russia's new legislation: Sign up to fight in Ukraine, write off bad loans

The government announced that Russian President Vladimir Putin has signed a law allowing those who signed up to fight in Ukraine to write off unpaid debts worth almost $100,000.

The new legislation will be a strong motivation for some to join up, experts said, as Russia seeks new ways to recruit fighters for the nearly three-year conflict grinding through troops.

The new legislation will allow those who sign a one-year contract to fight in Ukraine after December 1 to free themselves of existing bad debts. It also covers their spouses.

The law concerns debts where a court order for collection was issued and enforcement proceedings began before December 1, 2024.

The total amount of unpaid debt that can be covered is $96,000.

Parliament approved the bill earlier this month.

Russia has extremely high interest rates for loans and many Russians have almost no cash savings, although the proportion of home owners is relatively high.

"Previously (for those fighting) there was only provision for taking repayment holidays on loans," Sergei Krivenko of advocacy group Citizen Army Law told Vazhniye Istorii Telegram channel.

The new legislation applies to those who are conscripted for national service and those mobilised for the so-called "special military operation", Krivenko said.

'Strengthening the motivation'

Conscripts cannot be sent to the front line but can choose to sign a contract to join the professional army and be sent to fight in Ukraine.

Russian authorities "are strengthening the motivation to sign a contract," political analyst Georgy Bovt wrote on Telegram.

The legislation provides "another way to get rid of an unbearable burden of credit, at least for several hundred thousand people," Bovt wrote.

Over 13 million Russians have three or more loans, according to a central bank report released last month covering the first two quarters. This was up 20 percent on the same period last year.

The average amount owed by those with three or more loans is $13,400.

Many start with a bank loan and then apply for further loans from microfinance organisations.

Russians serving on the front line are already paid far more than the national average.

Ukraine also has legislation allowing those fighting to get preferential terms for loans and in some cases to write off debts.