And if at first controversial issues arose regularly, then with the expansion of judicial practice and the release of clarifications from the Russian Supreme Court, the procedure for declaring citizens bankrupt became clear and predictable. Let's consider what the latest changes to the law on bankruptcy of citizens have brought us, and how they will affect the procedure for declaring insolvency in the future.
Law and procedure for bankruptcy of individuals in 2020 step-by-step instructions
Let's start with the main thing, what is the bankruptcy procedure for an individual (insolvency)? This is the implementation of a set of measures and conditions, based on the results of which, any person, in accordance with the requirements of Chapter X of Federal Law No. 127-FZ “On Insolvency, Bankruptcy,” can get rid of unaffordable debt obligations.
In simple terms, this means that now any citizen can exercise the right to be declared bankrupt. To do this, you must meet the necessary conditions of bankruptcy law and file an application with the court. The application is accepted only if the citizen owes a bank or other organization more than 500 thousand rubles and has not made a single payment for 3 or more months. An exception to the amount of debt may be a situation where the total value of property owned by an individual is less than 500 thousand rubles, in which case it is possible to begin the procedure for declaring insolvent and with a smaller amount of debts. From practice, it is important to note that the minimum amount of debt for which it makes sense to pursue bankruptcy is 300 thousand rubles. Since the financial manager, court costs and other legal services will require large financial expenses, under which the bankruptcy procedure will not make sense.
Important! If the total amount of debt exceeds the amount of 500 thousand rubles, and there is no money to make payments, then, in accordance with the law, the procedure for declaring oneself bankrupt is not a citizen’s right, but an obligation!
In addition to the above conditions, it should also be taken into account that the debtor must have serious reasons due to which he lost the ability to pay his bills. Such reasons include loss of work due to staff reduction or liquidation of an organization, serious illness and other particularly compelling circumstances necessary for the court to make a decision.
In the process of recognizing the insolvency of individuals. persons, one of the following procedures may be applied:
- sale of the debtor's property;
- debt restructuring.
Sale of the debtor's property
If the court decides to sell the property, all of the debtor's property, with the exception of those indicated below, is subject to sale during bankruptcy proceedings. If the amount received after the sale of the property is not sufficient to pay off all debts and fulfill obligations to creditors, the debt obligations will in any case be cancelled.
Property and assets of the debtor that cannot be seized and sold during the proceedings:
- Owning a single apartment or any other living space, which also includes a share in the apartment (with the exception of housing pledged as collateral, including mortgaged housing);
- A vehicle, if it is proven that the debtor needs it for work (a contract on the basis of which the debtor works using a car is sufficient to justify this);
- Computers and computer equipment, here, just like with cars, it is necessary to prove that the equipment is used for work.
- State prizes and awards;
- Food products (required for adequate nutrition of the debtor and family, including children);
- Other property that is not subject to foreclosures and seizures, including items required for life.
Latest news
From January 1, 2020, the state fee when filing an application for bankruptcy will decrease by 20 times - from 6,000 rubles to 300 rubles. There are other initiatives designed to reduce the cost of getting rid of debts. Since January 1, 2020, no changes have been made to the law.
The next important changes in bankruptcy legislation may occur if the bill (No. 307663-7), submitted to the State Duma by deputy Nikolai Nikolaev, is adopted. Latest news from the State Duma - a document suggesting changes in the bankruptcy procedure for individuals is being prepared for the first reading before the end of the spring session of 2020.
The changes proposed by the bill should legislatively consolidate the practice of the Supreme Court of the Russian Federation, according to which arbitration courts will be required to introduce a bankruptcy procedure for an individual even despite the fact that the debtor does not have the funds to satisfy the claims of creditors (Determination of the Supreme Court of the Russian Federation dated January 23, 2020 No. 304- ES16-14541 in case No. A70-14095/2015).
Thus, the bankruptcy of an individual without property is recognized as a standard practice, the purpose of which will be not only to sell what belongs to the debtor in the interests of creditors, but also to write off unsustainable debts. Release from obligations, the fulfillment of which may take years, will occur if the debtor is found to be in good faith (did not mislead about his income when applying for a loan, 3 years before filing for bankruptcy, did not make suspicious transactions in order to hide property from creditors) .
How to find out tax debt on the Federal Tax Service website (nalog.ru)?
What documents must be submitted to court for bankruptcy?
Below is an exhaustive list of documents that must be submitted along with the claim for bankruptcy to the Arbitration Court. Not all of them are mandatory, but anyone can request a court order. Both the court decision itself and the time required for the bankruptcy procedure depend on the availability of most of the documents listed below.
- Statement of claim to the court for bankruptcy – ();
- The first step is to compile a list of those creditors who issued a loan to the citizen, in the case of tax debts, a demand for payment of tax debt and other documents relating to the debt;
- Extracts and available information on taxes paid (preferably for the last 3 years);
- A certificate from the bank about the availability of accounts and the balance of funds on them (if any);
- An inventory of all property owned by the debtor (including real estate);
- If the bailiffs made an inventory of the property, then this act is also attached to the general documents;
- You also need a certificate of income (preferably for the last 3 years), which indicates that the salary cannot cover large debts;
- Documents that can confirm the work activity of the debtor (a certificate from the employment service declaring a citizen unemployed, an employment contract with the employer, an extract from the Unified State Register of Individual Entrepreneurs - if you are an individual entrepreneur);
- If a citizen has recently made transactions with real estate or other property, the value of which is more than 300 thousand rubles, then you will need a copy of the purchase and sale agreement, which will also be accepted for consideration by the court;
- Documents that can confirm to the court that you have not declared yourself bankrupt in recent years, as well as documents confirming the lack of entrepreneur status;
- Medical certificates and extracts that can confirm disability or serious illness (if such were the cause or in any way could affect the citizen’s solvency);
- Certificate of marriage or divorce (if available);
- A copy of the marriage contract (agreement) (if available);
- Passport (and copy);
- TIN (and copy);
- SNILS (and a copy).
Consequences of declaring an individual bankrupt
The procedure has a number of features that cause certain inconvenience to the citizen. The main ones:
- Within five years, it will not be easy for him to get a loan, since by law a citizen is required to inform potential creditors in advance that he has recently been declared bankrupt. In any case, data on the bankruptcy procedure is entered into the credit history bureau and is contained in the citizen’s credit file;
- Also, for five years, an individual will not be able to again exercise his right to bankruptcy;
- A citizen will not be allowed to hold a position in the management of any legal entity or other leadership positions for three years. (If a citizen has the status of an entrepreneur, then it is canceled along with all licenses and permits);
- During the consideration of a case on declaring a citizen bankrupt, he does not have the right to enter into transactions for the sale of his property in an amount exceeding 50 thousand rubles;
- A ban is introduced on the purchase of shares and shares of organizations;
- It remains at the discretion of the judge whether or not a citizen is allowed to leave the territory of the country within a certain period of time;
- If a person tries to provide fictitious documents to declare him bankrupt, the court will order him to pay a fine or even initiate a criminal case, it all depends on the amount of the debt;
- In the event of the death of a citizen during the bankruptcy procedure, the case may be considered further, provided that his relatives or their authorized persons apply for this. This allows us to eliminate a number of controversial issues when both creditors and heirs will simultaneously claim the property of the deceased;
- Any gratuitous transactions relating to the alienation of the debtor’s property over the past 3 years may be cancelled.
How to recognize a bank on the verge of bankruptcy?
When assessing the potential reliability of a financial institution, it is worth focusing on a number of criteria. Based on them, one can judge how stable a financial organization is, whether bankruptcy or revocation of its license is expected in the future.
Analyze the following factors:
- The length of time the company has been in the market.
- Composition of investors.
- The fact of being part of a large group.
- Participation in the DIA.
- Presence of references in the media about an inspection by the Central Bank.
The last point is not yet a guarantee of problems for a financial institution, but for depositors it should be the first “bell”. If the results of the inspection are unsatisfactory, the credit institution may lose its license and cease operations forever.
What innovations in the law on bankruptcy of individuals can await debtors in 2020?
On January 1, 2020, new amendments regarding state duties for individuals came into force. As a result of the amendments, it was reduced by twenty times; now for filing a bankruptcy application you will need to pay 300 rubles, instead of 6,000 rubles. It is worth noting that the cost of the fee for legal entities remains the same and amounts to 6,000 rubles.
Also, which will be important for a larger number of borrowers, in 2017–2020 the Russian Ministry of Economic Development plans to simplify the bankruptcy procedure for individuals. Among the innovations discussed, we can note the ability to carry out bankruptcy without a financial manager. The adoption of the amendments will make the procedure more accessible to debtors drowning in micro-loans, as well as those with low income and debts in the amount of 50 - 150 thousand rubles. It is also worth noting that the procedure itself will take place in a shorter time. The planned amount of debts at which the simplified bankruptcy procedure will be available is from 50 to 700 thousand rubles.
Bankruptcy statistics
The law on bankruptcy of individuals has been in force for 2.5 years. The number of citizens who, on their own initiative, apply to the court for bankruptcy is growing. However, many of the nuances of this procedure are still incomprehensible to most ordinary people who do not have special knowledge. Lawyers are constantly asked the question - how does bankruptcy of individuals occur in 2020? The pros and cons for the debtor will be revealed in this article
According to statistics, about 45,000 Russians were in one way or another freed from debt obligations thanks to the rules on bankruptcy of individuals introduced into the Federal Law “On Insolvency (Bankruptcy)” in 2020. And although this is an insignificant figure compared to similar practices in European countries and the United States, this indicator indicates the ongoing improvement of bankruptcy legislation and the existence of fairly well-established judicial practice. These processes increase the accessibility and quality of legal proceedings in such cases, which means the number of people wishing to get rid of the debt burden by declaring insolvency will continue to grow.
As a percentage, the number of bankruptcy cases at the request of citizens themselves is much higher than at the request of creditors - 87% and 12%, respectively, another 1% of bankruptcy cases of citizens are considered at the request of tax authorities.
Review of the law on “tax amnesty” for individuals and individual entrepreneurs in 2018
