There are times when individual entrepreneur or a legal entity cannot pay its debts. So that they can avoid persecution by creditors or customers, a special article is provided that gives the right to declare enterprises bankrupt. The same right exists with individuals.
Law passed a decade later
For the past 10 years, the State Duma has not been able to adopt such a law as declaring a natural person bankrupt. The situation of citizens in case of impossibility to pay off loans on such a scale was not regulated. The scenario went in two directions: the bank filed a lawsuit in court or the sale of debt to collection agencies. In connection with the active practice of the latter, cases of criminal behavior of firms collecting the amount of a loan from a debtor have become more frequent.
After lengthy approvals, a bankruptcy law was passed on December 29, 2014. individuals, which was supposed to enter into force on January 29 of the current year. However, in practice, the normative act will come into effect on July 1, 2015, after it is published in the Rossiyskaya Gazeta.
Federal Law No. 127-ФЗ On Insolvency (Bankruptcy) has 233 articles as amended on December 29, 2014. Before going to court to initiate a procedure such as declaring a natural person bankrupt, you should fully familiarize yourself with the Federal Law to avoid errors and unnecessary red tape. Do not wait until the lenders themselves begin to act in relation to the citizen. Moreover, they can assign to the debtor their arbitration manager, and he will not act in the interests of the borrower. Filing a statement by the debtor himself indicates his awareness of monetary obligations and the desire to resolve this issue in a civilized manner.
Before the procedure
What steps should a citizen take and how is the bankruptcy law enforced? It is necessary to appeal to arbitration courts, since only they are engaged in similar cases. A manager is appointed to supervise the entire procedure, starting with the fact of submitting an application and ending with the final process, the nature of which depends on many factors. In advance, you need to take care of the evidence of insolvency that will be needed during the consideration of the case.
Bankruptcy of an individual and the grounds for the procedure
A citizen must have really good reasons for declaring himself insolvent. The requirements that are prescribed in the law state that the debtor has the right to sue if the loan amount is at least 10 thousand rubles and delays in payments occur more than 3 months. The exception is cases when there is a debt for claims for compensation of harm (of varying degrees and nature), for alimony and situations related to a person's personality.
When submitting an application, the debtor may attach a debt repayment schedule drawn up by himself. If the creditors agree with such a scheme, the citizen pays the assigned amounts within a certain time. At the same time, the debtor is not declared bankrupt, but he is completely released from obligations by full settlement.
Documents and Manager
You need to be prepared for the fact that you will need documents on the availability of property, including vehicles, luxury goods and additional living space.You will also need information on the number of creditors from whom the debtor took loans, and on the amount of debts under each of the agreements. In some sources, the list of documents also contains a certificate from the tax service on the amounts transferred over the past three years.
It should be noted that transactions completed 12 months before the filing of an application for bankruptcy of an individual are considered invalid and can be canceled.
A manager is appointed, whose candidacy is then approved by the arbitral tribunal. The expert is present at all stages of the procedure, evaluates the property and monitors. Such people are usually selected from among the arbitration managers of any self-regulatory organization at the place of residence of the citizen. If the debtor independently filed an application, he loses the right to choose a specialist.
The court's decision
In the event that a declaration of bankruptcy adopted and considered by the court, a decision is made. This can be both financial recovery (a series of measures aimed at improving the financial condition of the debtor), and observation. The latter is the activity of the arbitration manager to control the applicant in relation to property transactions that are prohibited from being carried out during the procedure, obtaining loans and other monetary transactions.
Property recovery
At the end of the above stage, bankruptcy proceedings begin, which is regulated by law. All property of the debtor, which may be seized and collected, is sold at auction. The proceeds are transferred primarily to the account of the arbitral tribunal, and then distributed among creditors.
Property not subject to arrests and penalties:
- The only own living space, even if there is only a share or the borrower lives in a rented apartment.
- Items that are necessary for life.
- Vehicles or computer equipment (if there is a contract under which the debtor works with the help of this property).
- Food products received in the farm (only in the amount needed to feed the debtor and his family).
- Awards and state prizes.
For property that belongs to the relatives of the debtor, arrest and collection do not apply.
The court's decision. Re bankruptcy
At this stage, the procedure for recognizing the insolvency of a citizen is completed, the court makes a decision that all obligations on cash loans and payments are withdrawn from the debtor.
The status is valid for five years, after which the former borrower loses it. Moreover, a person may be declared bankrupt repeatedly in an arbitration court. However, it is very difficult to prove the fact of impossibility to pay debts a second time.
Lenders may apply to the arbitration court to recover the loan amount from the borrower even after five years, but there is a limitation period. By law, banks have the right to demand repayment of obligations only within three years from the date of the last payment.
State duty
In the event that the decision on declaring bankrupt was made in favor of the applicant, payment of state duty can be made in two ways:
- through the sale of property of the debtor;
- the amount is collected from creditors.
Lawyers call the amount of 20 thousand rubles that a citizen must pay before considering the application (if he has this money). It makes no sense to hide your financial condition, since at the stage of observation the manager will prove falsification and the procedure will be refused.
The process takes about seven months in duration. During this time, undeclared creditors are entitled to apply to the arbitration court, which is involved in the procedure, with a request to collect the debt.
The consequences of the procedure
The procedure for declaring bankrupt provides for the actions of the manager to find out details related to property status, banking operations, hidden accounts, sales transactions during the year prior to filing an application, etc.
The State Duma, which passed the law, hopes that it will help Russian citizens to resolve issues related to debt problems. However, the bankrupt will not have the opportunity to go abroad, take a loan, buy an apartment or a car, and also make other financial transactions within the prescribed period. State Duma deputies believe that the law will improve society.
Features of the work of arbitration courts
Some experts say that with the onset of the date of July 1, the arbitration courts will not be able to cope with the work because there will be a mass of applications from citizens. However, understanding the importance of the adopted law, the issue of increasing the number of judges will be decided in order to comply with the procedure for considering cases.
