Why you shouldn't buy cars at bankruptcy auctions

Bankruptcy of an individual with collateral property

Due to a difficult life situation, you cannot pay off your loan or mortgage? The business turned out to be unprofitable and went bankrupt, but the debts remained? Is the organization suffering losses and unable to meet its debt obligations?

There is an exit. The legal way to write off all debts is to go through an insolvency procedure.

If you are afraid that banks will take away the collateral during bankruptcy, contact Glavbankrot LLC. A competent strategy will ensure complete write-off of the debt and safety of the collateral.

Cost of the procedure

Lack of property

Sometimes the results of the manager’s work to identify the debtor’s property for subsequent sale are not crowned with success due to its complete absence. In this case, the bidding stage is bypassed and the person is assigned bankrupt status.

At the same time, the court makes a decision to write off debts from the insolvent person. All unfulfilled obligations, both declared and not, are canceled if they are not included in the list of those that cannot be canceled.

A person declared bankrupt also undergoes legal restrictions. Thus, it is forbidden to hold leadership positions for up to 3 years, and it is prohibited to engage in entrepreneurship for up to 5 years. Obtaining a loan is possible subject to notification of the credit institution about the existing status.

A separate category of debts is not written off under any circumstances and it is possible to sell property after bankruptcy of an individual in the event of the emergence of new objects

Bankruptcy of an individual with collateral property

There is an exit. The legal way to write off all debts is to go through an insolvency procedure.

If you are afraid that banks will take away the collateral during bankruptcy, contact Glavbankrot LLC. A competent strategy will ensure complete write-off of the debt and safety of the collateral.

Cost of the procedure

Collateral property in a bankruptcy case can be realized in two ways:

public auction;
auction.

To carry out these activities, the arbitration court appoints a bankruptcy trustee who:

is engaged in the formation of the bankruptcy estate;
conducts property assessments;
publishes announcements about auctions and their results.

Payment for services is made at the expense of the debtor, the amount depends on the total value of the debtor’s collateral property and is:

with a book value of assets up to 250 thousand rubles. no more than 10% is allocated to the bankruptcy trustee;
up to 1 million rubles – 25,000 rubles and 8% of the value of property in an amount exceeding 250,000 rubles;
1 million - 3 million rubles. – up to 80,000 rubles and 5% of the amount exceeding the cost of 1 million;
up to 10 million rubles – the fixed rate is 185 thousand rubles. and 3% of the amount in excess of the value of the collateral property over 3 million;
from 100 to 300 million – 1,295,000 rubles and 0.5% of the amount exceeding 10 million;
up to 1 billion rubles – 2,295,000 and 0.1%;
if the value of assets is more than 3 billion rubles, the manager is paid 2,995,000 rubles and 0.01% of the difference between the value of the property and 1 billion rubles.

Also included in the expenses is the cost of publishing announcements in the Unified Federal Register of Bankruptcy Information and in Kommersant.

If you do not agree with the involvement of any persons to carry out the procedure and consider the amount of payment for their services to be unreasonable, you can file an appeal with the arbitration court.

The right tactics will help preserve the collateral property or minimize additional costs.

The procedure for selling collateral in bankruptcy

After the debtor is declared bankrupt, the procedure for selling the bankruptcy estate follows. The judge approves the bankruptcy trustee.
Preparatory stage
. The manager draws up an inventory of property, conducts an inventory for legal entities, and evaluates assets.
Draws up a report indicating the market value of the collateral property (determined by the appraiser), the conditions, methods and timing of the sale of the collateral property in bankruptcy.
The financial manager opens a special account in the name of the debtor, into which the proceeds from the auction will be received.
Notification
. The court sends a notice to the mortgagor or debtor that the property will be put up for auction. The notice contains complete information about the debtor, mortgagor, type of property, its value, location, as well as the date and time of the auction.
Publication
. The manager publishes announcements about upcoming auctions in open sources; interested parties must make an advance payment of 5% of the value of the property.
Bargaining
. The implementation takes place in three stages: primary, secondary, public auction. At each stage the initial cost decreases. The procedure is regulated by Art. 110, 111 of Law No. 127-FZ.
Debt coverage
. 70% of the value of the pledged property is transferred to account for the debt to the pledgee. The court divides the remaining 20% among other creditors in order of priority. 10% to cover legal costs and expenses for organizing auctions.
If, after paying all debts, there is money left in a special account, it is given to the debtor. If the money received from the sale of an apartment or a citizen’s car is not enough to cover all debts, then the court will still recognize the obligations as fulfilled.
But in the case of an individual entrepreneur, unpaid debts will pass to him as an individual.

Advantages and disadvantages

pros	Minuses
If an individual is declared bankrupt, then after the sale of property all debts are written off, even if the proceeds were not enough to cover them.	Any collateral is subject to sale.
During the bankruptcy procedure and the sale of collateral, accounts are frozen, and no interest or penalties are charged on loans.	They encumber apartments even if minor children are registered there or both spouses own the property.
During the bidding period, regulatory authorities do not charge penalties and fines on overdue obligations for tax deductions and contributions.	You cannot sell the property yourself at a favorable price.

How to preserve collateral in bankruptcy

In accordance with Part 1, Art. 466 of the Code of Civil Procedure of the Russian Federation, penalties cannot apply to the debtor’s only home if it is not mortgaged. To avoid repossession of an apartment or house, you need to try to achieve debt restructuring or a settlement agreement.

Retaining collateral in bankruptcy is a real possibility. Contact Glav Bankrupt LLC: many years of experience and competent specialists have developed a number of schemes that allow you to remove collateral from the bankruptcy estate. For each case, we look for an individual solution to the problem that will give maximum effect.

Bankruptcy of an individual with collateral property

There is an exit. The legal way to write off all debts is to go through an insolvency procedure.

If you are afraid that banks will take away the collateral during bankruptcy, contact Glavbankrot LLC. A competent strategy will ensure complete write-off of the debt and safety of the collateral.

Cost of the procedure

How to preserve collateral in bankruptcy

Source: https://glavbankrot.ru/sovety-yuristov/kak-prokhodit-bankrotstvo-fizicheskogo-litsa-s-zalogovym-imushchestvom/

Spouses' property

Now another interesting topic - how can the husband or wife of a potential bankrupt avoid risks? Let us note right away that if the spouses are divorced, the bankruptcy of one of them will in no way affect the property of the other.

A completely different story turns out with the property of the bankrupt spouse, which is in the joint ownership regime. According to the latest definition of the RF Armed Forces, all property owned by spouses is subject to sale with the subsequent return of 50% of the proceeds for the sale to the second spouse.

The Supreme Court considered a case in which the bankrupt demanded that part of the property be excluded from the bankruptcy estate. It officially belonged to his wife, according to the provisions of the marriage contract concluded between the spouses. However, the High Court disagreed with the debtor, citing the co-ownership regime. We can conclude that the wife’s property will be sold one way or another in the event of her husband’s bankruptcy.

Interestingly, children’s property is similarly subject to sale. But, as a rule, such precedents are rare, since children usually do not own anything. The exception is situations when an inheritance passes to a child. But even here, the right to dispose of property is usually granted to his parents.

The time frame for the sale of property in the procedure is usually 6 months, the exact dates are determined by the court in each individual case.

In addition to the already noted institutions of family law, spouses, in order to support the family and regulate property relations, can pay attention to foreign mechanisms, for example, discretionary trusts and private (family) foundations.

Moreover, given the growing number of international marriages, the use of such structures in certain cases may be even more appropriate compared to other tools. At the same time, we cannot exclude the risk of challenging foreign mechanisms abroad, in particular, in the case of dishonest actions of the founders when creating such structures and transferring assets to them.

In addition, given the beginning of the automatic exchange of tax information and the general increase in transparency of asset ownership in the world, such structures will be looked at more closely in the future to understand whether the interests, for example of creditors, were violated during their creation and transfer of assets. In this regard, we return again to the question of the timeliness of their establishment.

Therefore, if the spouses (or one of the spouses) are planning to create foreign structures, you need to think about such important issues as the transfer of assets into them, management and control, succession planning, the presence of claims of the spouses’ creditors, as well as tax and other aspects.

The opinions of experts from banks, financial and investment companies presented in this section may not coincide with the opinion of the editors and do not constitute an offer or recommendation to buy or sell any assets.

Property in case of bankruptcy of individuals: how to save housing

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Whether or not the only home is preserved in the event of bankruptcy of an individual is a controversial question. Much depends on the status of the property and the financial situation of the bankrupt person. As a general rule, the only apartment remains, and the mortgage is withdrawn in any case. But there are some features that need to be taken into account.

Conditions for preserving the only home in the event of bankruptcy of an individual

Bankruptcy involves writing off a borrower's debts if he can no longer pay them. But at the same time, the demands of creditors must be satisfied. This means that the bankrupt will pay for his debts with his own property.

The law strictly stipulates that individuals can be taken away in the event of bankruptcy. faces. This:

cash and assets;
furniture and household appliances more expensive than 10,000 rubles;
luxuries;
expensive clothes;
car, etc.

In this case, personal belongings, toys, children's clothing, medicines, food, household items, tools for earning money and other similar property are not subject to confiscation. If you prove that you need the car for work, the court may leave it.

The question of whether the apartment will be taken away or not is especially acute. Nobody wants to stay on the street.

If the home is the only one, then they cannot take it away for debts. But if the bankrupt has other real estate, for example, a share in his parents’ apartment or a private house suitable for living in, the apartment will be seized and sold at auction, and debts to creditors will be repaid from the funds received.

The law specifies under what circumstances bailiffs have the right to seize a single apartment, even if those living in it have a share. If the apartment is pledged to the bank, then it is confiscated in its favor, and the bankrupt must leave the premises.

Features of the sale of collateral property in bankruptcy

When filing an application for bankruptcy, a register of creditors is compiled. It indicates to whom and how much the debtor is obliged to pay, as well as the property used to secure loans.

If the only apartment is under mortgage, the mortgagee is usually the first to join the bankruptcy procedure. His ownership is confirmed by a mortgage agreement, mortgage and other title documents.

In case of bankruptcy, the collateral is seized and sold independently. The funds received are distributed as follows:

up to 70% - goes to the creditor who confirmed the pledge;
20% are transferred to the financial manager, and he repays other creditor claims with their help;
10% is transferred to a judicial deposit, from which legal costs and payment for the work of the manager are paid.

If the amount of debt to the mortgagor is less than 70% of the value of the property, then the mortgagor receives funds in proportion to the debt, and the rest is distributed among other creditors.

How is the assessment done?

There is an opinion that the financial manager carries out the assessment and you can somehow “agree” with him. In fact, the price of property in bankruptcy is set by a judge based on the appraiser's report.

If the debtor does not agree with it, he can hire an independent appraiser. He will assess the value of the property that was the subject of the proceedings and issue his conclusion.

The court may accept his point of view, but has the right to leave its own price.

Much depends on the financial manager during bankruptcy. He can use items whose total value is equal to the size of the debt to pay off debts, while keeping the bankrupt’s car or apartment.

Why can the only housing be seized?

Thus, in the event of bankruptcy of individuals, the only housing can be seized if it is under an encumbrance. The mortgagee may be not only a bank, but also any microfinance organization, consumer credit cooperative or private individual.

It is important to understand that not only mortgage real estate can be seized. If a bankrupt took out a consumer loan secured by his apartment, then the lender will claim it first, even if it is the only one.

Debt amount

The size of the debt is of key importance in bankruptcy, namely in confiscation. Thus, they will not be able to take the apartment if the amount of debt is less than 5% of the assessed value.

In addition, if the home is not the only one, then it may not be taken away if the income from the sale of other property is enough to pay off the obligations.

The borrower's income is also important. If its value is constant and the amount of obligations is relatively small, then the court may order debt restructuring instead of selling the property.

How to become bankrupt and still keep your property

The question of how to preserve property and become bankrupt interests many debtors. It is worth noting right away that illegal actions such as fictitious sales or bribery of a manager will not be considered further. There are legal methods for maintaining home ownership:

Carrying out restructuring through the court or by agreement with the bank. Most often it works when the borrower has only one lender, who is also the holder of the only collateral for the home. Restructuring is more interesting for him, since he will receive the entire debt plus interest, and not 70% of the collateral.
Carrying out restructuring through another bank. In this case, a regular loan is taken out, with the help of which the existing mortgage agreement is repaid, and the apartment is released from collateral. If it is the only one, it will remain with the borrower. But such an action must be carried out in advance, since not a single bank will contact a potential bankrupt.
Sale of property. Another way to save your home is to sell it to a close relative or friend. But you need to take into account that the financial manager has the right to protest all transactions made over the last 3 years. If he proves that the sale of housing was fictitious, the transaction will be terminated.
Conclude a prenuptial agreement with division of shares. In this case, housing will still be lost. But the bank will be obliged to return the borrower’s wife money proportional to the value of her share (after withdrawing the loan body and interest). After the funds are transferred to the spouse, the family will be able to purchase another home.
Inclusion of children. In this case, the sale of housing cannot take place without the approval of the guardianship and trusteeship authority, and they, naturally, will not give it. But it will not be so easy to allocate a share to children during bankruptcy - this must be done either before taking out a mortgage with the consent of the bank, or after removing the encumbrance, i.e., repaying the loan.

In any case, a potential bankrupt needs the advice of a professional lawyer specializing in insolvency cases to help preserve his property.

If there is no property

If the debtor does not have any property, and the seizure of the only home does not occur, then the court has no choice but to recognize the debts as hopeless and write them off. In this case, you cannot get rid of the need to pay:

alimony;
employee salaries;
debt for housing and communal services;
payments ordered by the court in some cases.

Immediately after bankruptcy, the former debtor will be subject to the following restrictions:

he will not be able to hold a leadership position in the company or be a civil servant;
will not have the right to engage in business for 5 years;
he will carry out most major transactions with the approval of the manager.

And also, a bankrupt will not be able to take out new loans and borrowings without first notifying the lender of his financial insolvency.

Mortgage and collateral: debunking myths

The main misconceptions regarding mortgages in bankruptcy are as follows:

you can sell a house to a relative and then return the property: such a transaction will be terminated if it was carried out within three years and the financial manager proves the fact of the relationship;
if the apartment is transferred to the spouse, you will not have to give it to the bank: in fact, until the mortgage is paid, the spouses have equal obligations regarding the debt and it will not be possible to divide or transfer it until the loan is repaid;

Thus, preservation of housing is possible only for those bankrupts who own the only apartment, while it is not pledged or children are among the owners. In all other cases, you will most likely have to part with the real estate. The greater the debt, the less chance you have of keeping your home.

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Source: https://zen.yandex.ru/media/bankrotof_net/imuscestvo-pri-bankrotstve-fizicheskih-lic-kak-sohranit-jile-5c0cb2ab9e2c8400a953e44a

If there is no property

alimony;
employee salaries;
debt for housing and communal services;
payments ordered by the court in some cases.

Immediately after bankruptcy, the former debtor will be subject to the following restrictions:

he will not be able to hold a leadership position in the company or be a civil servant;
will not have the right to engage in business for 5 years;
he will carry out most major transactions with the approval of the manager.

And also, a bankrupt will not be able to take out new loans and borrowings without first notifying the lender of his financial insolvency.

Deadline for selling objects from the property mass

It is legally determined at the federal level that no more than 6 months are allocated for the stage of property sale. Most often this stage takes 4 months. During the entire period of sale of property, restrictive measures are established in relation to the subject (it is prohibited to leave the country, alienate, destroy property, etc.). Based on the results of the performance of duties within the framework of this station, the manager reports to the court and creditors.

If the established deadline for implementation is not enough for objective reasons, the manager turns to the court, and it, if it deems it necessary, will make concessions and extend the deadline. Most often, an increase in time is required if obstacles arise in the return of illegally alienated property. Extension can be carried out more than once.

Tags: bankruptcy, collateral, property, save

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Video: our bankruptcy services for individuals. persons

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Last revised July 24, 2019

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Sometimes circumstances develop in such a way that there is no other option other than declaring bankruptcy. The first thing that will interest the debtor in such a situation is what happens to the property during the bankruptcy of individuals. Financial managers claim that even in the most difficult situations there is every chance of saving property; their experience and judicial practice confirm this. In this article, we collected expert opinions and analyzed many real life situations, based on current legislation and, in particular, the Law “On Bankruptcy of Individuals”. So, how to preserve property during bankruptcy? What do the experts say?

Appliances

According to Resolution No. 50 of the Plenum of the Supreme Court of the Russian Federation dated November 17, 2015, the debtor may be left with property that is necessary to satisfy everyday needs for food, treatment, hygiene and rest.

Following the logic, they should not take away:

washing machine;
fridge;
TV;
kitchen stove;
air conditioner, etc.

In practice, the issue is decided by bailiffs, taking into account the value of each item, its actual use, as well as the possibility of replacing it with a similar item, but of lesser cost. For example, if there are three TVs in the house, then they will take two and leave one (the cheapest one). If you disagree with the decision, you can challenge it in court.