Features of the procedure for declaring an absent debtor bankrupt

Consequences for the debtor during bankruptcy proceedings

Regarding property rights

• The acquisition of property (purchase of real estate, transport, expensive things, securities, shares, authorized shares, etc.), the sale of one’s property (sale, exchange, etc.) is possible only with the consent of the manager, and when the sale of property is introduced, then in general these operations are carried out by the financial manager personally without the participation of the citizen;
• A complete ban on donating your assets, contributing them to the authorized capital of companies, cooperatives, etc.;
• All registration actions with property (transfer of rights, encumbrance, etc.) are performed by the arbitration manager;
• Removal of the bankrupt from all operations on bank accounts, deposits and deposits (ruble, foreign currency). These powers are exercised by financial authorities, including the right to demand bank cards from the debtor and block them.

Other personal rights

• The right to be a guarantor, act as a guarantor, buy and sell debts, and pledge things is permitted with the permission of the financial manager;
• Prohibition on the purchase of securities, shares, stocks, units of legal entities;
• Restriction on foreign travel (courts impose such a measure at their discretion, or at the request of creditors). There are cases when a ban on traveling abroad is not imposed;
• Prohibition on opening bank accounts - from the moment of sale of property, the ability to open/close accounts in banking and other financial institutions remains only with the financial authority.

Regarding debts

• the amount of debt is fixed by freezing interest, fines, penalties, penalties, etc.;
• cases with bailiffs are stopped (except for some: alimony, harm to health and the like);
• all claims and claims are accepted in a single court - which conducts bankruptcy proceedings;
• agreements, contracts and agreements under which the debtor is provided with services and work may not be executed at the request of the performers (contractors) without taking into account the opinion of the citizen;
• debts are paid in order of priority (determined by law) according to the restructuring plan, and if the court ordered the sale, then as the debtor’s assets are sold.

Specifics of bankruptcy

An application for assigning bankrupt status to an absent defaulter is sent by the bankruptcy creditor or an authorized body. The amount of debt to creditors does not matter in this case.

Bankruptcy creditors are all sources of financing (except for authorized bodies, founders of the debtor and persons to whom the defaulter is liable for causing moral or physical damage).

An application may be submitted in the following cases:

• the individual debtor or the management of the debtor company is absent, and it is impossible to find out their whereabouts;
• the property of the debtor being liquidated does not allow the payment of legal costs in connection with the bankruptcy case;
• during the year prior to the submission of the application, no transactions took place on the bank accounts of the defaulter;
• other circumstances confirming the non-performance of commercial activities.

Read what are the differences between voluntary liquidation of a credit institution.

The liquidation of a foundation and other forms of non-profit organizations has a clear procedure established by law. Find out all about it in our article.

Sale of property

If the debtor does not meet the requirements for debt restructuring, the court declares him bankrupt and issues a ruling on the sale of his property.
From the moment the insolvent citizen is declared insolvent, the financial manager carries out the management of the funds and property of the insolvent citizen. Any property can be put up for auction, except for that which cannot be recovered in accordance with Art. 446 Code of Civil Procedure of the Russian Federation. In addition, property that is not of particular value - with a total value of up to 10 thousand rubles - can be excluded from the bankruptcy estate at the request of a citizen. Jewelry, luxury items priced from 100 thousand rubles, as well as real estate are sold through open bidding.

At the end of the process of implementation and settlements with creditors, the court makes an appropriate determination, and from that moment the debtor is released from all obligations that could not be fulfilled.

Features of bankruptcy of an absent debtor

This procedure is carried out according to a simplified scheme and has a limited circle of persons who can initiate it. Creditors or other interested parties have the right to demand that the debtor be declared financially insolvent in the following cases:

• the legal entity is listed in the Unified State Register of Legal Entities, but in fact the activity has not been carried out for more than 12 months;
• creditors, relatives or other interested parties have received a court decision declaring the debtor missing or dead;
• at the stage of financial recovery, supervision or external management, the manager appointed by the Arbitration Court discovers the absence of the director or founder at the place of registration for quite a long time.

It should be remembered that when a debtor who is actually absent is declared insolvent, all costs associated with the procedure are borne by the creditor or other interested party who submitted the application to the Arbitration Court.

The instability of the economic situation leads to the fact that a significant number of legal entities and individuals cease to fully fulfill their debt obligations. In this case, the current legislation says that they must be declared bankrupt.

But if you take the statistics, you can see that more than 70% of all debtors undergo a simplified procedure for recognizing financial insolvency, since they are absent. It is the legal mechanism for bankruptcy of an absent debtor that will be discussed below.

Russian legislation, which regulates all issues related to declaring a person financially insolvent, states that individuals and legal entities can become bankrupt. To prevent the courts, as well as other government bodies, from having any independent interpretation of such norms, a special law has been adopted about financial insolvency.

In order for the debtor to be declared absent, the following legal consequences must occur.

1. Cessation of any financial and operational activities. They mean the conduct by legal entities or individuals, as well as individual entrepreneurs, of activities aimed at generating profit or income. This is confirmed by the complete absence of any financial transactions, that is, the movement of material assets. In an example it looks like this.
2. Absence from the place of registration. According to regulations, any person, be it a legal entity or an individual, must have registration. This is necessary to make it easier for various regulatory authorities to exercise control over the payment of all mandatory payments (taxes, fees). Therefore, if the subject of economic relations is not at the place of registration for a long time, then this is grounds for considering that he is absent.
3. It is impossible to determine where the subject is. That is, his current place of registration and residence is not known, and it is not possible to establish it.

That is, if all three of these legal facts are present, then creditors and interested parties have every reason to begin bankruptcy proceedings.

Absent debtor bankruptcy scheme.

All legal entities must have governing bodies, as well as the address at which they are registered.

The activities of the enterprise and control over this are carried out by the director or manager, since they have the right to sign documents on financial and economic activities and reporting.

It is important to remember that only the presence of the three mandatory requirements mentioned above will be grounds for going to court. Otherwise, a refusal will be received at the beginning of recognizing the subject as financially insolvent.

The Civil Code clearly regulates how to recognize a person as absent. To do this, the interested person must contact the judicial authorities at the last place of residence or registration, with a statement asking these authorities to recognize the person as missing or dead.

Only after this, having such a decision in hand, can you motivate the fact of the debtor’s absence in the arbitration court and begin the bankruptcy procedure

But you need to pay attention to the decision of the plenum of the Supreme Court of the Russian Federation. He says that a court decision declaring a specific person missing is not mandatory.

Prosecutors, tax officials, as well as those individuals or legal entities (creditors) to whom the debtor has not fulfilled his obligations can appeal to the judicial authorities.

Procedure for declaring an absent debtor insolvent (bankrupt)

1. If it is clear in advance that the discovered property of the debtor will not cover all legal costs associated with the conduct of this case.
2. If during the last 12 months before the filing of the application for recognition as insolvent (bankrupt), no banking transactions were carried out related to the accounts of this individual or legal entity.
3. If there are other signs that can confirm the absence of entrepreneurial or other activities of the debtor.

It is impossible to exclude the possibility that the absent debtor did not become this way by chance. To do this, it is necessary, according to judicial procedure, to unravel the entire scheme, which was conceived and carried out by a negligent person who controls the debtor. These may include company managers, founders, shareholders and board members. If, as a result of the bankruptcy procedure, any property is not identified, then the procedure itself ends with the exclusion of the debtor from the One Municipal Register of Legal Entities.

Commentary to Art. 227 of the Federal Law of the Russian Federation “On Insolvency (Bankruptcy)”

1. As is known, for a legal entity, bankruptcy occurs when it is unable to satisfy the claims of creditors for monetary obligations and (or) fulfill the obligation to make mandatory payments, if the corresponding obligations and (or) obligations are not fulfilled by it within three months from the date when they were supposed to be executed.

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The basis for declaring a citizen bankrupt is his inability to fulfill monetary obligations and (or) the obligation to pay mandatory payments, if the corresponding obligations and (or) obligations are not fulfilled by him within three months from the date on which they should have been fulfilled, and if the amount of his liabilities exceed the value of his property.

These provisions do not apply when filing an application to declare an absent debtor bankrupt.

An application to declare an absent debtor bankrupt is accepted by the arbitration court, regardless of the amount of accounts payable, as well as in the absence of it.

2. Clause 1 of the commented article includes absent debtors as legal entities that have actually ceased their activities (current payments have not been made for a long time), are not located at the address specified in the constituent documents, and it is not possible to establish their location. These two characteristics of an absent debtor - a legal entity - are directly interrelated.

3. An absent debtor-citizen is understood as an individual who has ceased to engage in entrepreneurial activity, is absent from his place of residence and whose whereabouts are unknown.

4. An application to declare an absent debtor bankrupt may be submitted to the arbitration court by the bankruptcy creditor or an authorized body.

5. The provisions of paragraph 3 of Art. 6 and paragraph 2 of Art. 7 of the Bankruptcy Law concerning the right to apply to an arbitration court.

6. The concept of “absent debtor”, used in the Bankruptcy Law, has nothing to do with the institution of recognizing a citizen as missing (Articles 42 - 44 of the Civil Code of the Russian Federation).

7. In accordance with paragraph 2 of the commented article, an application to declare an absent debtor bankrupt is submitted by the authorized body only if the funds necessary to finance bankruptcy proceedings in relation to the absent debtors are available; the procedure and conditions for financing bankruptcy proceedings, including the amount of remuneration of the bankruptcy trustee, are determined by the Government of the Russian Federation.

In the absence of adequate funding, the authorized bodies do not have the right to apply to the arbitration court to declare the absent debtor bankrupt. If the arbitration court receives the said application, the arbitration court on this basis has the right to return it to the authorized body in accordance with clause 1 of Art. 44 of the Bankruptcy Law.

The Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated April 8, 2003 No. 4 (clause 7) contains an explanation according to which, by virtue of clause 2 of Art. 227 of the Bankruptcy Law, in the absence of financing of bankruptcy procedures for an absent debtor, applications for declaring such a debtor bankrupt are returned by the arbitration court, and cases for declaring absent debtors bankrupt, initiated before the entry into force of the Bankruptcy Law, for which no decisions were made to declare absent debtors bankrupt, are subject to cessation of production.

Simplified bankruptcy procedures

Simplified bankruptcy procedures are used to more quickly exclude from property circulation entities that have practically ceased their activities, are in the process of liquidation, as well as those whose location is unknown.

In this case, supervision, financial recovery or external management are not applied.

Signs of insolvency (bankruptcy) may have both entities that have the prospect of restoring solvency, as well as entities that have practically ceased their activities, are in the process of liquidation, as well as those whose location is unknown.

In this case, in order to more quickly exclude such entities from property circulation, simplified bankruptcy procedures are applied.

To simplified procedures applied in bankruptcy cases and regulated by Ch. XI Federal Law “On Insolvency (Bankruptcy)” includes:

1. Bankruptcy of the liquidated debtor.
2. Bankruptcy of an absent debtor.

The above procedures apply to a liquidated or absent debtor.

The liquidation commission (liquidator) is obliged to apply to the arbitration court to declare the debtor bankrupt if the value of the property of the debtor - a legal entity in respect of which the decision to liquidate was made - is insufficient to satisfy the claims of creditors.

Nuances of bankruptcy of an absent debtor

The key feature of this procedure is the strict limitation of the number of initiators of consideration of the case for granting bankrupt status. Only a month after submitting the application to the Arbitration Court will the absent debtor be declared insolvent. As a result, the organization is liquidated and bankruptcy proceedings begin.

There is another option in which it is possible to declare the debtor absent. If during the observation stage the temporary manager notifies the court about the presence of signs of the subject’s absence, then the case will be considered within a month according to a simplified procedure. This 30-day period is intended to notify the debtor's creditors and receive their claims. Satisfaction of claims occurs in the order of priority.

After the financial insolvency of the absent debtor is recognized, measures are taken to secure the claims of creditors.

The use of simplified bankruptcy procedures for a liquidated and absent debtor indicates the skipping of stages aimed at the financial rehabilitation of the organization and the introduction of external management. The entire procedure ultimately takes less time than a standard bankruptcy.

When the bankruptcy trustee concludes that the debtor’s property is sufficient to pay off legal costs, he sends a petition to the court, after which procedures directly related to bankruptcy begin.

It should be noted that court proceedings in the absence of the debtor have several differences from the traditional procedure. In this case, legal costs are borne by the state authorized body that submitted the application. He will have to pay both the state fee and the work of the temporary manager.

You should know that both an individual and a legal entity can be recognized as an absent debtor.

It can be summarized that according to the Federal Law “On Insolvency”, bankruptcy can be initiated if at least one of the conditions is met:

• the location of the defaulter is unknown and cannot be identified;
• more than 1 year has passed since the debtor’s profit-generating activities ceased.

Separately, it is necessary to dwell on the procedure for recognizing an individual as absent. In this case, the procedures for missing citizens are different from those prescribed in the Civil Code.

The following is considered sufficient grounds:

Bankruptcy upon liquidation of the debtor

The debtor liquidates its activities as a business entity, provided that its assets do not cover all claims for obligations and payments to creditors.

In this case, the liquidation commission sends an application to the court to declare the debtor bankrupt. The court makes a decision to declare the entity bankrupt and open bankruptcy proceedings.

The creation of a register of requirements is organized according to the rules of law. The establishment of priorities for satisfying requirements is carried out in accordance with the approved amount of all requirements contained in the register.

If the entity does not comply with the requirements for mandatory application to the court to declare it bankrupt, then the body that enters information into the register of organizations will refuse to register the liquidation of the debtor.

In addition, the bankrupt owner who violated the specified rules for going to court bears subsidiary liability for unfulfilled obligations to creditors.

Peculiarities of bankruptcy of a liquidated debtor

If the value of the property of a debtor - a legal entity in respect of which a decision on liquidation has been made - is insufficient to satisfy the claims of creditors, the liquidation commission (liquidator) is obliged to apply to the arbitration court to declare the debtor bankrupt.

If the liquidation commission (liquidator) has not applied to the arbitration court to declare the debtor bankrupt, this is grounds for refusing to make an entry on the liquidation of the legal entity in the unified state register of legal entities.

If the above circumstances are discovered after the decision to liquidate a legal entity and before the creation of a liquidation commission (appointment of a liquidator), an application to declare the debtor bankrupt must be filed with the arbitration court

• owner of the property of the debtor - a unitary enterprise,
• founder (participant) of the debtor or
• the debtor's director.

The arbitration court decides to declare the liquidated debtor bankrupt and to open bankruptcy proceedings and approves the bankruptcy trustee.

Supervision, financial rehabilitation and external management do not apply in the event of bankruptcy of a debtor being liquidated.

Creditors have the right to present their claims to the liquidated debtor within a month from the date of publication of the announcement declaring the liquidated debtor bankrupt in accordance with Article 71 of the Federal Law.

The owner of the property of the debtor - a unitary enterprise, the founders (participants) of the debtor, the head of the debtor and the chairman of the liquidation commission (liquidator), who committed a violation of the requirements provided for in clauses 2 and 3 of Art. 224 of the Federal Law, bear subsidiary liability for unsatisfied claims of creditors for monetary obligations and for the payment of obligatory payments by the debtor.

Benefits of Bankruptcy

The bankruptcy law allows a person to get rid of financial obligations that he cannot pay off due to the circumstances in his life. This is its main advantage. Before this law was passed, outstanding debt could be collected from a person throughout his life.

Current legislation provides for the possibility of transferring a citizen's debt obligations to his heirs after death. Bankruptcy provides an opportunity to get rid of a person's outstanding debts during his or her lifetime.

At the time of the bankruptcy procedure, a moratorium is imposed on the accrual of penalties, fines and penalties on a person’s debt obligation. At the same moment, all enforcement proceedings that were initiated against a bankrupt individual are suspended.

The repayment of financial obligations takes place in accordance with the procedure provided for by the insolvency law. Bailiffs and debt collectors cannot put pressure on the debtor at this stage.

What documents are needed for bankruptcy?

The list of necessary documents, which, along with the application, are submitted to the court, is given in paragraph 3 of Art. 213.4 Federal Law No. 127. These include:

• documents proving that a person has a debt and is unable to repay it (claims, agreements with creditors, reconciliation reports, etc.);
• extract from the Unified State Register of Individual Entrepreneurs on the presence/absence of individual entrepreneur status;
• lists of creditors indicating the amount of debt to each of them;
• copies of documents on transactions made by a citizen over the last 3 years with real estate, vehicles, securities, if the amount of such transactions was more than 300 thousand rubles;
• inventory of property and documents confirming ownership of property;
• if the debtor is a participant in a legal entity, it is necessary to attach a list of all participants of this legal entity;
• data on income and taxes paid for the last three years;
• bank certificates on the availability of deposits, accounts, account balances, statements of transactions performed during the previous three-year period;
• copy of TIN;
• a copy of SNILS and data on the status of the personal account;
• if available - a copy of the marriage/divorce certificate, a copy of the marriage contract, a copy of the agreement on the division of property of the spouses, copies of birth certificates of children, a copy of the decision to recognize the debtor as unemployed;
• other documents related to the circumstances described in the bankruptcy application.

Step-by-step instructions for bankruptcy of an absent debtor

1. Filling out an application to the court or other authorized body, as well as notifications to partners who have the opportunity to repay the debt, instead of the absent person. But, it should be remembered that all costs during the proceedings are borne by the debtor.
2. Based on the evidence presented (a certificate from the police, about the conduct of search activities), a certificate from the bank (about the absence of business transactions) and other documents, the court decides whether to declare the absent debtor bankrupt: the status is assigned within a month, and can be appealed at any time . After the verdict is announced, any manipulations to find the location of the absent debtor are stopped.
3. A court decision is an official document, a certified copy of which is provided to all lenders, in person or by mail (letter of notification).
4. Further, creditors have the right to send petitions to the court, where the judge will consider each case individually. Sometimes, instead of cash payments, debt repayment can be carried out by transferring property in the form of real estate, land, car, etc. But, in this case, the received real estate (or other property) will be considered the “Fixed Asset” of the organization. In order to convert fixed assets into cash equivalent, they must be sold.
5. First of all, the judge considers applications with the highest amount or depending on the agreement drawn up between organizations. Each creditor is assigned an individual meeting date, which will consider all aspects of receiving and returning money.

How does bankruptcy happen?

Bankruptcy under a simplified procedure for a liquidated debtor begins from the time a well-drafted application is sent to the court. It should indicate the need to carry out a simplified process. The process has specific features, since actions related to supervision are not carried out, and external management is not assigned and the recovery of the company is not allowed.

Step-by-step instructions for the bankruptcy of a liquidated debtor consist of sequential actions:

• an application is submitted to the court, and usually the initiator is the bankruptcy trustee himself, but it is allowed for this to be carried out by various government organizations;
• within a month after filing the application, bankruptcy proceedings begin;
• the manager sends notifications to all creditors, and certainly in writing;
• a month is given for each creditor who received the letter to submit claims directly to the manager;
• absence insurance is not provided;
• If during the procedure, property is discovered, the value of which is considered sufficient to cover legal costs, then a petition is sent to the court to terminate the ongoing procedure.

Those who are interested in starting a bankruptcy procedure are the creditors who cannot receive their funds from a company or individual, and they have the right to control the entire procedure in order to challenge various transactions of the borrower or determine his property that can be sold, and the funds received are used to pay off debts .

When carrying out this simplified procedure, it is taken into account whether the debtor became absent on purpose or accidentally. Therefore, the task of the court is to determine all the circumstances of such a case. Often this scheme is carried out specifically by the company’s managers or its auctioneers.

If the initiator is a creditor , then he is obliged to independently finance the case, as well as cover the legal costs of considering the case in court and paying remuneration to the insolvency administrator. Upon liquidation of the company, the creditor writes off the expenses, which are accounted for as legal fees. Therefore, they are included in non-operating expenses.

Signs

Most creditors do not understand at what point it is necessary to file a claim with the arbitration court with a request to begin consideration of the case of the absent debtor and forced collection of the debt.

Let's look at the obvious signs of a missing borrower:

• For twelve months there is no movement in all of a person’s bank accounts. The arbitration judge first submits a request to the tax office to obtain a certificate of the existence of accounts with an individual or legal entity. Later, the statements are checked for all banks where the debtor has accounts. The last twelve months from the date of filing the claim are reviewed. If no cash flows were found for the entire year, this is a clear sign of an absent debtor;
• The person does not respond to any notifications about the need to repay the loan, including telephone calls and letters;
• Visits to the place of residence do not yield any results: either no one opens the door for the bailiffs, or people living in the housing claim that the debtor does not currently live at this address. In addition, specialists interview neighbors and relatives of the debtor. If this procedure also does not produce positive results, this is a sign that the borrower has disappeared;
• The absence of any property assigned to a person. First of all, experts send requests to the traffic police, Gostekhnadzor and other authorities, from which they can obtain information about the debtor’s registered real estate or cars. If the responses received indicate that the property is not enough to repay the loan, the procedure for declaring the absent person bankrupt is carried out;
• If the debtor is a legal entity, and in the presence of the above signs it is also obvious that its enterprise has ceased business activities, we can conclude that the founder of the company has disappeared.

As we can see, there is a fairly large list of signs on the basis of which an individual or legal entity can be considered missing and bankruptcy proceedings can begin.

Signs of a debtor's absence

The court recognizes the debtor as absent if there is a combination of the following factors:

• absence of any signs of entrepreneurial activity: all contractual relations have been terminated;
• business entities are absent at the place of registration of the legal entity or registration at the place of residence of the citizen, and their current location cannot be determined;
• lack of funds and property, during the sale of which it was possible to cover legal costs;
• lack of funds in current accounts and suspension of all banking operations throughout the year;
• Submission of reports to the Federal Tax Service and state funds has been stopped.

Who can be declared bankrupt

Not every debtor has the right to declare himself insolvent. A person can file such an application in court if he meets certain criteria listed in Art. 213.3 Federal Law “On Insolvency”. Firstly, a citizen’s total debt must reach 500 thousand rubles, the number of creditors and the amount of debt to each of them does not matter, and secondly, loan obligations must not be fulfilled for at least three months.

A citizen is presumed to be insolvent when at least one of the circumstances listed in Art. 213.6 of the above-mentioned law:

• the person stopped paying creditors;
• over 10% of credit obligations by the debtor have not been fulfilled for more than one month;
• a citizen’s debt is higher than the value of his property;
• there is a resolution to terminate enforcement proceedings due to the person’s lack of property that can be seized.

It is worth considering that a debtor is not declared insolvent if there is reason to believe that he is able to repay the debt within a short period using his income.

Step-by-step instruction

To achieve the required result, a number of actions must be performed:

• An application has been sent on behalf of the bankruptcy creditor or authorized body.
• The arbitration court must make a decision on the bankruptcy of the person. The procedural document must be issued by a single judge within one month from the date of receipt of the application.
• All known creditors were notified of the fact of their debtor's bankruptcy.
• Within a month, claims from lenders were received.
• A transition has been made to a general procedural procedure in the event that the debtor has property whose value is sufficient to cover the costs of the legal procedure.
• The stated requirements have been satisfied in accordance with the legally prescribed priority.

Bankruptcy prevention is the goal of any enterprise and legal entity. faces. How the initiation of bankruptcy proceedings proceeds and what is needed to start it - we will tell you here.

Hidden threats

In the case of bankruptcy of individuals, the consequences for the debtor are not always so obvious and predictable. Often, a citizen's behavior can cause unpleasant surprises. The laws provide for criminal liability for the defaulter:

Forethought

When a citizen brings the state of his affairs under the signs of insolvency, but at the same time he could have prevented this (Article 196 of the Criminal Code of the Russian Federation).

Example: a citizen lent money to his friend, but did not demand its return after the expiration of the loan agreement, did not go to court to collect non-payment, or to bailiffs to enforce the debt. As a result, an individual is not able to pay off his creditors, but he could do this if he claimed his debt.

fictitiousness

The debtor, having created the appearance of a lack of finances, applies to the court to initiate a procedure, although in fact he is quite wealthy (Article 197 of the Criminal Code of the Russian Federation). Pursued goal: to obtain a deferment in the payment of debts for the duration of the introduction of the procedure or even write-off (forgiveness) of arrears.

Illegality

Fraud with property (concealment from creditors, secret sale, deliberate destruction, etc.), settlements with an individual creditor to the detriment of others (out of turn, without respect for proportionality, etc.), illegal opposition to the arbitration manager (Article 195 of the Criminal Law) .

• A crime is considered committed if the actions of the offender cause damage to creditors in excess of 1.5 million rubles.
• If the losses are less, they may be brought to administrative liability under Articles 14.12., 14.13 of the Code of Administrative Offenses of the Russian Federation.
• I can also bring you to criminal (Article 159.1 of the Criminal Code of the Russian Federation) or administrative liability (Article 14.11 of the Code of Administrative Offenses of the Russian Federation) for the fact of concealing information from banks and other lenders about bankrupt events in the life of a citizen.

Another unpleasant consequence is absolute financial loss. The man sought to rid himself of debt. Spends time, effort and significant sums on legal expenses, fees to the financial manager without a second thought about whether the debt remains after bankruptcy. But in the end it turns out that there are circumstances due to which the debt remains in its previous form (even increases due to penalties and fines). In this case, the procedure is considered completed, no one will return the costs for it. Plus there are still debts. As a result, the debt minus becomes even greater.

Flaws

A disadvantage of the procedure is the large number of papers that will need to be submitted to the arbitration court to initiate the process of declaring a citizen insolvent. To consider the case in court, you will need to pay a state fee and deposit a fee with the court. Its size in 2020 is 25 thousand rubles.

The procedure involves the payment of remuneration to the bankruptcy trustee for conducting the debtor’s case. It amounts to 7% of the sale of the debtor’s property. You will also have to spend money on ongoing costs that will arise during the process. These include the costs of publishing announcements, the costs of holding auctions of the debtor’s property and other necessary and justified costs in the opinion of the court.

Practice shows that on average the amount of current expenses can range from 80 to 100 thousand rubles. For an insolvent person, these are significant amounts.

During the bankruptcy procedure, almost all the property of the bankrupt individual will be sold. The law allows not to confiscate from him only cash in the amount of up to 25 thousand rubles, clothes, shoes, utensils and household appliances necessary for life, the cost of which does not exceed 30 thousand rubles. The debtor’s housing, which is his only one, is not taken away if he is registered in it and it is not under a mortgage.

During the procedure, the financial manager fully controls all the person’s income and expenses. The process can last more than one year. Such control is quite tedious. Until its end, the debtor will not be able to leave the country, and after that, occupy leadership positions with a legal entity.

When making any transactions, a person will be obliged, in accordance with the law, to always indicate the fact of his bankruptcy.

Simplified bankruptcy system: advantages and nuances

A simplified bankruptcy system is applied if the missing manager does not have any property.

Bankruptcy and liquidation under a simplified scheme has a number of undeniable advantages:

1. Speed ​​of the procedure. This is explained by the absence of claims from creditors and debts to counterparties. It takes a couple of months to complete all the paperwork and determine the “Bankrupt” status. Under the usual liquidation scheme, legal proceedings can drag on for almost a year.
2. The trustee executing the will of the absent debtor is obliged to prepare all the necessary documents, as well as pay fees. This can include communication with tax authorities, prosecutors, and creditors.
3. A simplified bankruptcy scheme does not imply financial supervision, regulation of business activities, or transfer of management to another person. This significantly speeds up decision-making time and reduces paperwork.
4. The organization is excluded from the general list of legal entities and transfers documents for storage.
5. The acceptable cost of the entire bankruptcy procedure will not hit the wallet of the representative of the liquidated organization: the cost is determined by the number of procedures performed and paperwork completed.

After full registration of an organization or individual as bankrupt, the data is sent and registered in the unified Unified State Register of Legal Entities. The end of legal proceedings means that any banking or other transactions with this person are not possible.

Signs of an absent debtor when

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bankruptcy

At the request of the authorized body, a legal entity may be declared insolvent (bankrupt) even if it has no debt to creditors and mandatory payments, if there are signs established by Art. 230Bankruptcy Law.

An application to declare an absent debtor insolvent (bankrupt) can be filed by a bankruptcy creditor or an authorized body, regardless of the amount of debt of the debtor (Clause 1, Article 227 of the Bankruptcy Law).

An absent debtor is a special group of defaulters for whom the bankruptcy procedure is applied in a simplified form. An absent defaulter is an individual or legal entity.

If we are talking about an enterprise, then an absent defaulter is understood as the head of a company that no longer carries out commercial activities, is not located at a registered address and the location of the head cannot be determined. Absent individual debtors cease their business activities, are absent from their place of residence and their location is unknown.

Some creditors mistakenly believe that hiding the manager will solve all his problems. However, this is not the case.

Bankruptcy of an absent defaulter is a simplified procedure, and it is very simple to recognize the subsidiary liability of the debtor’s director (even easier than under the usual procedure).

Article 227 of the Bankruptcy Law lists the criteria by which an absent defaulter is determined:

• actual cessation of activity (essentially liquidation of the company);
• failure to arrive at the registration address;
• inability to determine location.

The fact of absence is determined through the court. A corresponding decision is made if a person is absent from the place of residence for more than a year.

The legislative framework

An individual can obtain bankrupt status on the basis of Federal Law No. 127 dated October 26, 2002 (current version of the Federal Law dated July 29, 2017) “On Insolvency.” The standard includes 12 chapters and 233 articles.

Until 2020, the law applied exclusively to legal entities, but from October 1, 2015, an ordinary citizen can declare himself bankrupt.

Among the main provisions of the law relating to individuals, the following can be noted:

In addition, certain nuances are spelled out in other special articles, including for certain categories of citizens.