Citizens often get loans without taking into account their real financial situation. This often leads to the fact that they can not cope with the credit burden. Under such conditions, filing for bankruptcy is considered the optimal solution. The procedure is considered complex and lengthy, so it is advisable to use the help of professional lawyers. Therefore, each person should figure out how to file a bankruptcy of an individual for loans. In this case, you can save your property, pay off most of your debts and write off the remaining debt.
Concept of procedure
The bankruptcy of individuals is regulated by Federal Law No. 127, and this law was adopted at the end of 2015. Numerous amendments are regularly introduced into this normative act, allowing to improve and simplify the procedure.
What does bankruptcy of individuals on a loan mean? It is provided by the procedure on the basis of which a citizen is recognized as financially insolvent. Therefore, all issues with banks and other creditors are resolved exclusively through the court.
How are the processes implemented
Different methods of implementing the bankruptcy procedure of an individual may be chosen. The step-by-step instruction of each option involves the execution of sequential actions. It is recommended that you first contact a lawyer for an up-to-date consultation. A citizen who has many loans and financial problems can choose one of the options:
- Debt restructuring. This option is ideal for people who have personal property with which they do not want to part. In this case, you need to contact the lenders to change the terms of the loan. The procedure is implemented through the court, and the duration of the restructuring should not be more than 36 months. A payment schedule is formed with all creditors, on the basis of which funds are paid to pay debts. Restructuring is proposed for exclusively responsible citizens who are faced with specific financial difficulties. Debt should not be too big.
- Sale of property. Before the procedure, the law on the bankruptcy of individuals should be carefully studied. Loans issued by a citizen will have to be repaid in a mandatory case. If the borrower has personal property, then it is sold by decision of the court at auction. The funds received from this process are used to repay loans. If there is not enough money to pay off the debts, the rest of the debt is written off. The property sale procedure is implemented by the appointed financial manager. According to the law, the only housing of the debtor, as well as his personal belongings or household items, cannot be sold.
- Drawing up a settlement agreement with creditors. If there are small amounts of debt, and at the same time loans were issued from several companies, then it is advisable for the parties to draw up a settlement agreement. The court stipulates all the nuances of repaying the debt, which takes into account the optimal timing of the return of funds. The procedure for the return of money is established. But after drawing up such an agreement, the debtor is declared insolvent.
Before filing a bankruptcy of an individual on loans, the bank insists on the application of restructuring, as it is often due to it that a citizen actually manages his existing debts without selling his property.Lenders themselves are forced to meet the debtors, offering them simpler and more affordable conditions for paying off debt.
It is anticipated that a simplified bankruptcy procedure will be introduced in the future. It will be carried out through the court, but the financial manager will not be involved. This will significantly reduce the cost of the process.
Validation of the use of the procedure
Prior to the immediate start of the process of declaring a citizen insolvent, the court must determine how reasonable the claim is. If there are no signs of the bankruptcy of the debtor, the claim will not be considered, about which the plaintiff will be notified in writing, therefore, the bankruptcy of individuals will not be carried out. A court decision to terminate the procedure is taken under the following conditions:
- there is no evidence that indeed the debtor cannot handle loan payments;
- it is impossible to find signs of insolvency in a citizen;
- there are signs that intentional bankruptcy has taken place.
Often, courts have to deal with the fact that citizens specifically bring themselves to bankruptcy, wanting in this way to get rid of loans without losing personal savings and property. If a bankruptcy petition is filed for an individual containing false information, this leads to the bringing of the plaintiff to administrative responsibility. Therefore, he will have to pay a fine of up to 3 thousand rubles. Additionally, the lawsuit will not be considered, so the citizen will have to cope with loans on his own. Often, even with significant amounts of loans, a person can be prosecuted.
Signs of Bankruptcy
Before filing a bankruptcy of an individual on loans, the court must make sure that a really specific citizen is insolvent. The main signs of insolvency include:
- the presence of debt, the amount of which exceeds 500 thousand rubles., and it can be formed on the basis of several loan contracts;
- delay in loans exceeding 3 months in duration, and the countdown starts from the moment when funds are not paid to pay the loan;
- the citizen’s inability to cope with the credit load due to a significant deterioration in financial condition or lack of savings.
Insolvency is represented by a situation where a citizen’s income does not exceed the subsistence level, therefore he does not have the ability to make further payments to pay off loans. In case of bankruptcy of individuals, loan debts will be repaid to the maximum at the expense of the citizen’s property, but some of them will be written off. The procedure may begin with the direct debtor or his creditors.
How does the process begin
In order to declare a person insolvent, a bankruptcy petition is submitted to the court. This is due to the fact that it is during the trial that all circumstances are considered that confirm the need to declare a person insolvent. Penalties presented by banks on the basis of arrears arising are not included in arrears.
Every debtor who understands that he can no longer cope with the credit load must figure out how the bankruptcy procedure of an individual is carried out. The step-by-step instruction of the process involves the implementation of the initial steps:
- an application is submitted to the court within 30 days from the moment when the citizen realized that he could not cope with the payments;
- usually the countdown starts from the moment of dismissal from work or registration of a disability group;
- the intention to go to court is published in the media if the debtor is an IP, and the notification should be given 15 days prior to the direct transfer of the claim to the court.
The application should be transmitted with other documents confirming the presence of debt and the lack of funds for its repayment.
What documents are needed
Before filing a bankruptcy of an individual on loans, the following documents should be prepared:
- securities from banks proving the existence of a debt that exceeds 500 thousand rubles in size, and usually for this purpose bank statements are taken or copies of loan agreements are made;
- a list that includes all property owned by the debtor, and it is advisable to use the help of an appraiser in advance to find out the approximate cost of these values;
- certificate of funds received by a citizen over the past three years;
- personal documents presented by a copy of the passport, TIN, SNILS and other important papers;
- certificate of family composition;
- a copy of the work book indicating a reduction or demotion of a person in the position at work;
- certificate of registration with the employment center if a citizen has lost solvency due to dismissal;
- other documents confirming the poor financial condition of the citizen.
If necessary, the bank may require other documentation. The conditions for bankruptcy of individuals on loans are the same for all citizens, but different circumstances may affect the procedure. Therefore, it is advisable to use the help of lawyers.
What actions are taken by lenders
Rarely do lenders think about how to declare a natural person bankrupt on a loan, since it is in the interests of banks that the citizen himself manage the payments and return the funds. This is because if the borrower does not have valuable personal property, then debts can be written off after the bankruptcy process. As a result, lenders do not receive their funds. This leads to the fact that banks often create obstacles to declaring a person insolvent.
To suspend the bankruptcy of a citizen, lenders can use the following methods:
- protesting transactions, on the basis of which property was previously sold by citizens, and transactions made during the last three years may be affected;
- protesting deed of gift, exchange agreements or other contracts that are doubtful and involving the transfer of property of the debtor to third parties;
- obtaining evidence that the citizen has additional hidden income that can be used for the gradual repayment of loans.
All evidence collected must be referred to the court.
The procedure for declaring a person bankrupt
Each debtor should know how the bankruptcy of individuals is realized. A court decision is made solely after performing numerous sequential actions. These include the following:
- an application is submitted to declare a particular citizen insolvent;
- an amicable agreement is drawn up between the debtor and the creditors, on the basis of which a restructuring is carried out, which allows the debtor to cope further with payments, and the procedure involves the involvement of a financial manager;
- if the terms of the agreement are violated by the debtor, the procedure for declaring it bankrupt continues;
- then the process of selling the property of the debtor begins, which will partially or fully cover the debts of the citizen;
- any valuable property is sold, but this does not include a person’s only housing or personal belongings;
- a special manager appointed by the court is involved in the process;
- tenders are held for the sale of values;
- all the debtor's money held in cash or on bank accounts is used;
- the size of the living wage for the family is determined;
- all financial transactions are performed exclusively by the manager;
- Prior to the immediate sale of values, all objects owned by the debtor are evaluated to determine if a part of the kayak’s debts will be repaid after the sale of the property.
Each participant in the process can engage their own independent appraiser to make sure that the property value is correctly determined. After receiving the money, the debts are repaid, for which the priority of the creditors is taken into account. The manager receives a remuneration of 2% of the amount of debt. After the end of the process, a citizen is declared bankrupt, and the remaining debts are written off.
The consequences of the procedure
Every person going through a bankruptcy process needs to know what the consequences of this operation are. Although a significant portion of debts is written off, there are some drawbacks to the procedure. These include:
- all valuable personal property is lost;
- during the next 5 years, it will not be possible to file an application for declaring a person bankrupt repeatedly;
- not allowed to hold leadership positions for three years;
- registration of IP is prohibited throughout the year.
Will they give a loan after the bankruptcy of an individual? Banks can make a positive decision at the request of a citizen, but the questionnaire must be indicated within 5 years that a person was previously declared insolvent. This usually leads to the fact that institutions refuse to issue funds.
Process cost
Many companies offer the opportunity to conduct a bankruptcy process for a private person for a small amount of funds not exceeding 50 thousand rubles, but you should not believe such offers. This is due to the fact that not only specialists will have to pay for their work, but also to the arbitration manager.
The amount of manager's remuneration depends on the size of debts, therefore 2% of the total debt is usually paid.
Conclusion
In the presence of a significant amount of debt, citizens often use the bankruptcy of individuals. Collateral for loans allows lenders to pick up property of citizens, as well as other human property is sold at auction. The consequences of this procedure are not only positive, but also negative.
Although due to bankruptcy it is possible to cope with all debts, it will not be possible to issue an IP in the near future, take a leadership position or re-use the procedure for declaring a person insolvent. Therefore, it is advisable to initially take into account your financial capabilities when applying for loans.