In 2015, a law was passed that allows an individual to become bankrupt. Despite the fact that the name of such a procedure looks rather menacing, the bankruptcy of individuals is the only legal way to get rid of credit obligations and debts partially or completely.
In the article, we consider who benefits from bankruptcy.
Federal Law of the Russian Federation of October 26, 2002 No. 127-ФЗ “On Insolvency (Bankruptcy)” is a key regulatory act, on the basis of which the court can declare a legal entity or individual bankrupt, as well as make a number of decisions related to recognition of insolvency.
Basic concepts
Who benefits from bankruptcy physical. persons is a common question. Under this term, it is customary to understand the material insolvency of citizens, the inability to cope with the requirements of creditors at the right time and in full. The elimination of current debts at the legislative level helps to get rid of previously taken obligations legally.
Bankruptcy proceedings improve the financial situation of both parties to the conflict. For lenders, additional money is collected to pay off the debt. Persons who do not have options to pay, get the opportunity to cancel all obligations with the least material loss.
Who benefits from bankruptcy?
When answering this question, it is necessary to determine who can declare bankruptcy. This procedure is a very complex, lengthy and costly process, therefore, before it begins, the establishment of the expediency of its implementation is required.
This requires careful weighing of all the main and additional arguments, an assessment of one's own strengths and material condition, including property and official income. Is it profitable to engage in bankruptcy of individuals? Let's figure it out. Such a benefit is not considered a universal solution, but is determined in view of the specifics of a particular life situation.
Legal advice
In such a situation, it is best to get advice from a qualified lawyer who can tell you in detail about all the restrictions and consequences that bankruptcy will entail. He will also explain some of the features and complexities of this process. A lawyer will also help establish who benefits from bankruptcy and who does not.
Who can declare himself insolvent
Any person who has no opportunity to pay off partially or fully unpaid monetary obligations in the near future can file a bankruptcy petition.
For example, a citizen suddenly lost a source of income, so in the future his debts will only accumulate. If all the above conditions are met, a person can benefit from declaring him bankrupt, that is, get rid of debt obligations or expect a significant reduction in their size. It is necessary to correlate the benefits received and the possible costs and problems. In addition, many debts are not repaid through bankruptcy. These include, for example, child support, compensation for damage to human health and life. In many cases, debt restructuring is considered a more appropriate solution.
Bankruptcy Benefit for Lenders
Since not only individuals, but also creditors can apply to the court with a statement of their financial insolvency, they also get some benefit from it.The interest of financial organizations in the bankruptcy of their debtor may be due to various reasons. For example, writing off bad cash debt and lowering the tax base. If the actions of the manager of the financial organization are performed correctly, the organization may receive part of the debt as a result of contesting transactions, as well as selling the property of the debtor. Since the arbitration manager receives 7% of the monetary amount of the satisfied claim, this is partly in his interests.
Who benefits from the bankruptcy of individuals, we consider further.
Unscrupulous and bona fide debtors
Debtors who are trying to apply for bankruptcy can conditionally be divided into 2 categories: bona fide and unscrupulous.
Conscientious debtors are
- people who fell due to a difficult economic situation under a reduction or a decrease in wages;
- were careless while making financial decisions, for example, foreign currency mortgages;
- borrowers in difficult life situations.
Unscrupulous debtors are credit fraudsters, who are also called “professional creditors”. They initially did not intend to repay the loan taken from a financial institution. In some cases, they can pay off their debts in full or in large part, but they do not want to do this.
To whom the bankruptcy law is beneficial, not everyone understands, we will explain.
The law does not apply to those debtors who are beyond poverty. It affects those citizens who have something in their property and who can be bankrupted in reality, those who have money for bankruptcy proceedings.
Amount of debt
In order to initiate bankruptcy proceedings, a person must at least have debts of 500,000 rubles. An unscrupulous debtor, of course, can go to his friend and give him a receipt for this sum of money. Thus, he has a formal debt. However, this will be extremely unreasonable, because if you start the procedure for recognizing its insolvency, a person who is ignorant of the details can commit many violations. It must be clearly understood that bankruptcy proceedings can go through, however, in this case, a citizen may not get rid of debts.
Which debtors are interesting for financial managers?
Bankruptcy of individuals is in principle disadvantageous for financial managers. A fee of 10,000 rubles (according to law) for the entire procedure, as a rule, does not stimulate anything. And even the additional interest on the sale of the property of the debtor is very low - 2% of the property sold at auction, if at all. This does not help, because the penalties for financial managers are the same as for arbitration, leading bankruptcy cases. And this procedure itself is quite laborious and responsible. The bulk of Russian citizens are so poor that they have practically nothing to take.
For most arbitration and financial managers, the bankruptcy procedure for individuals is not interesting at all. One group of managers puts the process on the line (no one will help the debtor and take care of its interests. There is an exclusively formal approach to the procedure. There is a second group of financial managers who will individually agree on a more serious amount of remuneration.
Many debtors believe that all the costs of the procedure are about 10,000 for the salary of the financial manager and 7,000 rubles of state duty. But no. In addition to the indicated amounts of money, there are many other various additional costs:
- various kinds of state duties (for extracts, certificates, etc.);
- involvement, if necessary, of persons providing the activities of the arbitration manager.
If you imagine that the debtor has property that is located in another city, you must at least ensure its protection. You will need money to travel. Or such a case when a person lives in a small city, and the bankruptcy procedure is carried out in the arbitration court of the regional center. It is necessary to go there several times, and for this the debtor pays for everything.
Here is a paradox - to get rid of debt, you must have money. In this case, you must either return everything or pay people who will help get rid of debts. Nevertheless, the question remains why bankruptcy is profitable.
About the benefit in general
The procedure for declaring a person financially insolvent has many advantages. Both parties are often interested in this. Debtors have a real opportunity to get rid of depressing debt obligations, which they can not cope with in any way. At the same time, they should not hope for a quick write-off of debts. Previously, the optimal solution remains to be found, whether it is restructuring of cash or the sale of part of the property to repay the loan.
For creditors, including banking organizations, supplier contractors and other interested parties, recognition of a debtor as financially insolvent is sometimes the only method of debt collection.
We examined who benefits from bankruptcy. We hope that this issue has become more understandable.