Poor debtors will receive a bankruptcy assistance

Sergei Levichev, head of bankruptcy practice, commented simplified citizens bankruptcy procedure bill to Kommersant daily.

Insolvency practitioners offered a simplified procedure of citizens bankruptcy that provides quicker case hearing and absence of individuals’ expenses for that. The offer is designed for poor citizens, whose debts do not exceed 1 million rub., cost of property - 500 thousand rub., and salary - three minimum wages. The creditors have right to abandon simplified procedure, but in that case they will have to take all expenses for carrying out of bankruptcy procedure.

"Kommersant" managed to get familiar with amendments to bankruptcy law prepared by workgroup of All-Russian labor union of Insolvency practitioners (ORPAU; 1,5 thousand participants) and of union of their self-regulated organizations (Uniters 26 SROs). They offer to complement citizens’ bankruptcy procedure with simplified procedure for lower-income debtors. Ivan Rykov, member of ORPAU central committee, said that the offers will be sent to relevant committee of State Duma and of Ministry of Economics in the nearest time.

It’s been a year since citizens were allowed to use individual bankruptcy procedure - since October 1, 2015. 14 thousand of such cases are being heard now - it’s about 2% of potential bankrupts. There were 622 thousand of them at the beginning of September 2016 according to data of National Bureau of Credit Histories. Their average debts exceed 1 million rubles, according to “Kommersant”. The debtors are often business-credit pledgers. According to CB data as of 1st August, total overdue amount of bank debts of individuals amounted to 911 bln rub. (831 bln rub. a year ago).

Simplified procedure provides that hearing of case will take several months. The project says that only a citizen himself with debt from 50 thousand rub. to 1 mln rub. can ask for simplified procedure, if his monthly income didn’t exceed three minimum wages and bank accounts didn’t exceed 50 thousand rub. within last six months. It will also require absence of property and real estate pledge (except for only residential property), and cost of all property shall not exceed 500 thousand rub., the debtor himself shall not be married and if he is divorced - the marriage shall be dissolved earlier that three years before bankruptcy. New rules do not apply to citizens with unquashed conviction for economic crimes or with unexpired term for involving under administrative rule from economic sphere. Generally, the simplified process is designed for common consumer credit borrowers that are not related to business sphere. In order to prevent cases of impersonation of poor people by rich ones, the procedure shall not be implied to debtors that have alienated their property at the cost exceeding 200 thousand rub. within the last year. <...>

According Sergei Lavichev, head of Pavlova&Partners law firm bankruptcy practice, the bankruptcy threshold shall be increased from 50 thousand rub. to 250-300 thousand rub. in order to avoid barrage of legal recourses and to create mechanism of blocking of access to simplified procedure for unfair individuals that hide their assets.

Read more: http://www.kommersant.ru/doc/3094800

Back to the list

Ирина Кошечкина