What debts are not written off in the event of personal bankruptcy? persons What many don’t expect, but it is

1. Stages of recognizing the insolvency of an individual
2. What debts are canceled
3. What debts will not be written off in bankruptcy?
4. Write-off of debts in case of bankruptcy of a citizen and arbitration manager
5. Judicial practice on writing off debts through bankruptcy
6. Guarantees of debt write-off in bankruptcy

Clearing or writing off debts through bankruptcy is the final part of the insolvency proceedings for a citizen. But the very fact of initiating a bankruptcy procedure does not guarantee such an outcome. Circumstances may arise in which debts will have to be paid.

Stages of recognizing the insolvency of an individual

The annulment of financial obligations is preceded by strictly regulated by law stages of the judicial procedure:

1. Acceptance of an application for recognition of the insolvency of a citizen. Appointment of an arbitration (financial) manager. Bankruptcy cases are considered by the arbitration court at the location of the defaulter.
2. The arbitration manager finds out the financial situation of the debtor, makes an inventory of his property, and draws up a list of creditors.
3. Development of a restructuring program or a settlement agreement, if the meeting of creditors together with the manager sees such a possibility.
4. Sale of the debtor's property, if there are no grounds for restructuring or a settlement agreement. Directing the proceeds to pay off its financial obligations.
5. Payments to creditors. Upon completion, a court decision on bankruptcy and debt write-off will be issued.

ATTENTION! A bankrupt is released from monetary obligations, even if the proceeds from the sale of his property are not enough to satisfy the claims of creditors.

The waiting time for debt forgiveness in bankruptcy cannot be determined in advance. Art. 51 of Federal Law No. 127-FZ limits this period to seven months from the date of filing the application with the court. But in fact, the proceedings continue until all mandatory measures have been completed. The duration of the procedure depends on the workload of the judge, the professionalism of the financial manager, the productive activity of creditors, and the legal competence of the debtor.

REFERENCE! The amount of debt is fixed at the initial stage of the bankruptcy case. The accrual of interest, penalties, penalties, and fines ceases.

Reviews about the benefits of the procedure

As mentioned earlier, the purpose of bankruptcy for an individual is to get rid of debts. This procedure can be carried out in two stages: debt restructuring and sale of property at auction.

Read Mortgage after bankruptcy of an individual: will they give a mortgage loan for a bankrupt?

Practice shows that bankruptcy rarely involves both stages. Very often it all ends with debt restructuring. The financial manager negotiates with creditors and seeks relief on debt repayment. Refinancing is offered, payment terms are extended, credit holidays are established, during which only the body of the loan needs to be paid. Penalties and late fees are frozen. The purpose of restructuring is for the debtor to pay all due funds, albeit over a long period of time and with some benefits. If the terms of the restructuring are satisfactory to both parties, a settlement agreement is signed and the bankruptcy case is terminated. As a result: debts are not written off, but the applicant gets the opportunity to independently solve the problem that has arisen and avoid the negative consequences of bankruptcy.

It is important to note that the restructuring process is under the control of an external manager, who conducts all negotiations with creditors for you. This will protect you from unpleasant communication (especially if the bank sold the debt to a collection agency under an assignment agreement) and will protect you from legal mistakes that can be made due to legal illiteracy.

What debts are canceled

The court may decide to write off the debts of an individual through bankruptcy:

• unfulfilled obligations to banks, microfinance organizations, private creditors (including those not listed in the register of creditors);
• debts for housing and communal services;
• taxes, fees, duties of the Pension Fund and the Federal Tax Service, if the bankrupt is an individual entrepreneur;
• obligations for deliveries, contracts and other types of contractual relations.

ATTENTION! Income tax is not charged on debt written off during bankruptcy proceedings for an individual. Basis - clauses 62, 63 of Art. 217 Tax Code of the Russian Federation.

Dispelling popular myths

1. My debts will not be written off, but all income will simply be confiscated to pay off the debt. This is not entirely true; you need to understand how the bankruptcy procedure is actually carried out. Often it ends at the restructuring stage, when creditors meet halfway and provide preferential terms for repaying the debt. In this case, the court gives a certain period and makes a decision. They will not leave you completely without a livelihood, because according to the law, you can deduct no more than 50% of your permanent official income. You will be left with a subsistence minimum, and if you have dependent minor children, disabled people or persons declared legally incompetent, everything will be decided on an individual basis.
2. Not all debts will be written off, only the smallest ones. The bankruptcy procedure considers not only loans and borrowings, which make up the lion's share of debt, but also financial obligations to individuals and government agencies. If, by a court decision, you are required to pay off the damage caused, there are debts on taxes, pension contributions or utility bills, then these debts cannot be written off as part of bankruptcy. The situation is similar with alimony.
3. After bankruptcy, you cannot leave the country or get a job. Restriction on the debtor's travel is a very rare and selective measure that is only possible during the procedure. Declaring a citizen financially insolvent does not prohibit him from working for hire, even in a managerial position. Yes, there is a ban on engaging in entrepreneurial activity, but a wife, husband or close relative can obtain the status of an individual entrepreneur.

Read How to file bankruptcy for an individual at the MFC in 2021

What debts will not be written off in bankruptcy?

According to Art. 213.28 of Federal Law No. 127-FZ, bankrupt status does not exempt from payment:

• debts accumulated since the filing of the application with the court;
• compensation for harm caused;
• alimony;
• salaries to employees (if the bankrupt is an individual entrepreneur);
• compensation for damage due to an offense (criminal offense, road accident and others);
• debts associated with subsidiary liability in relation to the insolvency of legal entities;
• compensation for loss if it is proven that it was caused intentionally or is the result of gross negligence;
• compensation for transactions declared invalid on the basis of Art. 61 of Federal Law No. 127-FZ.

ATTENTION! Circumstances preventing the write-off of debts in the event of bankruptcy of individuals must be confirmed by strong evidence and recorded in judicial acts.

Also, the debtor may not receive bankruptcy status and not get rid of debts if he deliberately violated the requirements of the law:

• provided false information about monetary transactions for 3 years;
• avoided fulfilling financial obligations, for example, had sufficient income not to become a debtor;
• initiated a fictitious bankruptcy - in the hope that debts would be written off, took out loans and did not plan to pay them back.

The fact of criminal prosecution for fraud, malicious non-payment, and illegal lending will play a negative role.

ATTENTION! It is necessary to familiarize the court with information relating to all types of financial activities, from bank loans and deposits to savings in cryptocurrency. Attempts to hide the true situation or present it in a false light may lead to dismissal of the case and administrative liability.

What do you need to know first?

Anyone who has gone through bankruptcy proceedings at least once knows: this is a long and difficult process that requires time and financial costs. As experts note, it will be very difficult without a minimum level of legal training. Sometimes mistakes are made even by existing general lawyers who do not specialize in supporting bankruptcy of individuals.

The purpose of the procedure is one - to write off debts. Both debtors and creditors strive for this, depending on who filed a claim in the Arbitration Court. If such a claim is filed by an individual, then he will have to make every effort to convince creditors, the external manager and the court that there are no funds to pay off the debt. You will have to provide evidence and documents, and the financial manager will carefully check all transactions made in the last three years. This is done in order to prevent deliberate or fictitious bankruptcy. In some cases, transactions are canceled, and property and real estate are returned to the general bankruptcy estate, after which they are sold at auction to pay off the debt.

You will have to spend a lot of time collecting documents and certificates. At this stage, legal assistance will be very useful, because it is important not to miss deadlines for filing documents with the court and to submit requests correctly. If you feel that the debt is growing like a snowball and its size will soon exceed 300 thousand rubles, you can start preparing documents in advance. In any case, the court will accept the statement of claim for consideration only after you exceed the limit of the announced amount.

Bankruptcy of individuals

from 5000 rub/month
Read more
Services of a credit lawyer

from 3000 rubles
Read more
Legal assistance to debtors

from 3000 rubles
more
Write-off of loan debts

from 5000 rub/month
Read more
Bankruptcy of individuals

from 5000 rub/month
Read more
Services of a credit lawyer

from 3000 rubles
Read more
Legal assistance to debtors

from 3000 rubles
more
Write-off of loan debts

from 5000 rub/month
More details

Write-off of debts in case of bankruptcy of a citizen and arbitration manager

The participation of an arbitration manager is a mandatory condition of the judicial procedure for recognizing insolvency. His professional duty is to analyze the financial condition of the debtor. A specialist will quickly determine the true state of affairs and identify facts in favor of writing off the debt or, conversely, making it impossible. He has the right:

• manage money from the accounts of a potential bankrupt;
• describe his property;
• receive information from various sources about transactions and monetary transactions carried out by the debtor and his relatives;
• challenge transactions completed within 3 years;
• apply for a way to satisfy creditors' claims.

ATTENTION! The arbitration manager is an intermediary between the debtor, the judge and the creditors; the development of events in a bankruptcy case depends on his position. But he cannot be 100% sure that debts will be written off in the event of a citizen’s bankruptcy. The final decision is made by the judge.

What expenses await you?

This is one of the main related problems in bankruptcy of individuals. It is logical to assume that the applicant does not have enough funds to make at least the minimum loan payments. But such a complex procedure a priori cannot be free. Here's what you'll have to find funds for:

• Payment of state duty. A receipt for payment of 300 rubles is included in the list of mandatory documents considered by the Arbitration Court in bankruptcy cases.
• Mailings to creditors and to the court. As practice shows, this will require about 5 thousand rubles.
• Publications in the media that you have filed for bankruptcy. This is done so that all creditors learn about this in a timely manner and can submit their claims on time. It will cost about 10,000 rubles.
• Payment for the services of an external financial manager. The amount is transferred to the deposit of the Arbitration Court, and its amount (25 thousand for each stage of bankruptcy) is prescribed in the current regulations.

To summarize, to successfully complete bankruptcy and write off debts you need about 80 thousand rubles.

Judicial practice on writing off debts through bankruptcy

The “Insolvency (Bankruptcy) Law” came into force in 2015. As practice shows, more than 50% of those who tried to get rid of financial obligations with its help were unable to do so. The situation is explained:

• unlawful actions of the debtor and his legal incompetence;
• the reluctance of creditors to write off debts; for them this is an exceptional situation.

Considering that the interests of lending banks are protected by trained lawyers, the debtor must provide only truthful and convincing information, control the situation and be able to defend his rights.

ATTENTION! A bankruptcy applicant can harm himself even by taking a passive position during the consideration of the case. Avoidance of interaction with the financial manager, ignoring court requirements and inattention to postal notifications are regarded as dishonest behavior.