Institute of bankruptcy of a citizen-debtor: new in legislation and practice

On July 1, 2015, the law on bankruptcy of individuals came into force. It is aimed at citizens who cannot cope with their debt obligations to financial institutions. The procedure allows you to officially get rid of debts. Declaring a citizen insolvent is a long and complex process. It is necessary to involve a financial manager, collect a large package of documents and then apply to the Arbitration Court.

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Where does the process begin?

A citizen can initiate the process on his own or involve a representative of a law firm. There are many companies offering assistance in bankruptcy of individuals. They provide services on a paid basis, the cost of legal support starts from 10,000-20,000 rubles. Acting independently or with the involvement of a company, a citizen must draw up an application to the Arbitration Court of his region and support it with the following documents:

documents confirming the fact of debt formation and its amount (issued by a credit institution);
an extract from the Unified State Register stating that the citizen is not an individual entrepreneur. The extract must be recent, received a maximum of 5 days before the date of filing the application with the court;
a list of credit institutions to which a citizen owes money, an indication of their addresses and the amount of actual debt under each individual agreement;
an inventory of the citizen’s property, including that which acts as collateral to any creditor. Inventory according to RF form No. 530 dated 08/05/2015, approved by the Ministry of Economic Development;
copies of documents confirming ownership of a citizen’s property;
copies of documents confirming that a citizen has completed the following transactions over the past three years: transactions with real estate and vehicles, with shares in the authorized capital, with securities, any transactions in the amount of 300,000 rubles or more;
certificate of income for the last three years indicating tax and other deductions (certificate 2NFDL);
if a citizen has open accounts and deposits, it is necessary to take an extract for each for the last three years;
a copy of the pension insurance certificate;
copy of TIN;
if the citizen is unemployed, a document confirming this from the Employment Center;
copies of all documents on marital status: certificates of marriage, divorce, birth of children, marriage contract;
documents for other circumstances, if the citizen speaks about them in court.

Conditions for bankruptcy of individuals

Chapter X of Law No. 127-FZ of October 26, 2002 “On Insolvency (Bankruptcy)” fully describes the bankruptcy procedure for a citizen of the Russian Federation.

An individual is obliged to file for bankruptcy within 30 days if there is a debt to several creditors in the amount of more than 500,000 rubles and the debt is not paid within 3 months (clause 2 of Article 213.3, clause 1 of Article 213.4 of Law 127 -FZ).

But you can declare insolvency at your own request (clause 2 of Article 213.4 of Law 127-FZ), even if the amount of debt is less than 500,000 rubles, provided that:

the citizen is unable to pay creditors;
more than 10% of the debt amount is overdue for more than a month;
the amount of debt exceeds the value of the debtor’s property;
the absence of property was confirmed by bailiffs.

You can't just declare yourself bankrupt. Only an arbitration court can do this. Therefore, a citizen needs to draw up an application and send it to the judicial authorities. In addition to the individual himself, one of his creditors, as well as an authorized state body, can begin bankruptcy proceedings.

The court makes the first decision

Having received and examined the package of documents, the court makes a decision as to whether the case for declaring the citizen bankrupt can be continued. Accordingly, the application may be considered justified or unfounded. If the application is found to be justified, the court may involve other authorities in the process. For example, if the rights of minors may be violated during bankruptcy, then the guardianship authorities are involved in the case.

Also, after recognizing the application as justified, the court appoints a financial manager in the case. This is the person who will further handle all financial issues and study the matter from this side. The court decision indicates the details of the appointed financial manager, as well as the date of the next court hearing.

Article 213.6 of the Federal Law “On Bankruptcy”, paragraph five, talks about the timing of further consideration:

The issue of recognizing as justified an application to declare a citizen bankrupt and the introduction of restructuring of his debts must be considered at a court hearing no earlier than fifteen days and no later than three months from the date the court accepted the application to declare the citizen bankrupt.

If the court decides that the bankruptcy procedure is justified, then another obligation is imposed on the applicant - payment for entering information into the Unified Federal Register of Bankruptcy Information. At the moment, within the framework of one case, the applicant spends 1782.4-3564.8 rubles on this.

In addition, if a decision is made to declare a citizen bankrupt with subsequent restructuring or sale of property, then it will be necessary to publish this information in the media, namely in the Kommersant newspaper. Publication costs 7,000 rubles.

Important! If the court found the application for bankruptcy to be justified, from that moment the citizen must suspend all payments to credit institutions. The accrual of fines and penalties will be stopped, and debts will be recorded.

Three ways to start a citizen’s bankruptcy procedure

1. The right to declare oneself bankrupt

The general rule that is worth remembering is that if a citizen has reached a period when he is no longer able to pay his debts, he has the right to apply to the arbitration court for his own bankruptcy. In this case, the size of his debts and the reasons for their occurrence are completely irrelevant. The main thing is to prove to the court that it is no longer possible to pay. If everything is clear about the amount of debt and it is not difficult to prove its size in court, it is enough to request certificates from creditors, but insolvency is not such a simple concept. Let's consider when a citizen is declared insolvent.

As the law states, a citizen is presumed to be insolvent provided that at least one of the following circumstances occurs:

- the citizen stopped making payments to creditors;

- more than 10% of the total amount of monetary obligations and (or) obligations to pay mandatory payments that a citizen has and the deadline for fulfillment of which has come, have not been fulfilled by him for more than one month from the day when such obligations and (or) obligations are due to be fulfilled;

- the amount of a citizen’s debt exceeds the value of his property, including the right of claim (the only housing does not count);

— the presence of a resolution on the termination of enforcement proceedings due to the fact that the citizen does not have property that can be foreclosed on.

If the court establishes that, taking into account wages or other income, a citizen will still be able to pay off debts within a short time, he will not be declared bankrupt.

2. Bankruptcy initiated by a creditor

A citizen may be declared bankrupt by his creditor: a bank or microcredit organization. In this case, the law provides for restrictions on the amount of debt. Thus, a creditor has the right to file for bankruptcy of a citizen if the amount of debt owed to him is at least 500 thousand rubles, and the delay lasts for at least three months.

Citizens often confuse this rule of law and assume that it applies specifically to those who decide to go bankrupt themselves. Don't be confused!

In this case, it does not matter at all whether the creditor “dissolved” your debt or not. He can file for bankruptcy without a court decision to collect the debt from you, but if the following requirements are met:

— The debt was collected according to the notary’s writ of execution. We will talk about what this is in the next issue.

— The debt is confirmed by documents, and the citizen acknowledges the debt.

— The debt arises from the loan agreement.

In all other cases, before a creditor wants to declare you bankrupt, he will first have to go to court and collect the debt from you.

3. Obligation to declare bankruptcy

And finally, the third norm, which obliges the insolvent citizen to declare his self-bankruptcy, whether he wants it or not.

So, a citizen is obliged to declare himself bankrupt if his debt exceeds 500 thousand rubles and he is unable to repay it on time. This must be done within 30 days from the moment the citizen learned (or could find out) about his financial insolvency.

It should be remembered that failure to fulfill this obligation is subject to administrative liability - a fine for violation - from one to three thousand rubles! However, for now these fines are only in theory. After all, it is generally accepted that bankruptcy is not a cheap procedure and many cannot afford it. Is it really? Let's figure it out.

How much does bankruptcy cost?

There is a belief: in order to prove his financial insolvency, a citizen needs to spend a lot of money.

The minimum required costs for a simple bankruptcy procedure, which lasts up to six months, are about 40 thousand rubles. Of these, 25 thousand rubles are the statutory remuneration of the financial manager, approximately 5-10 thousand are the fee for publishing information about the procedure in open sources. There is also a state fee (300 rubles), mandatory postal and other expenses and expenses for a lawyer to draw up a bankruptcy petition and collect documents - from 5,000 rubles.

However, in most cases, real expenses even with a simple bankruptcy start from 150,000 thousand and above. A large share of them are expenses for legal services. But how necessary are they? Often, in a simple bankruptcy, a lawyer is needed only to draw up a bankruptcy application (from 3,000 rubles), help in collecting documents (from 5,000 rubles) and find a financial manager. After the court accepts the application and initiates bankruptcy proceedings, a lawyer is no longer needed and three entities enter the scene - the arbitration court, the financial manager and the debtor. I assure you, they can cope quite well without a lawyer.

Therefore, the first advice for those who have decided to become bankrupt is to pay the lawyer only for the actions he actually performs, run away from those who indicate one amount for an abstract service, for example, 100,000 rubles for “participation in a bankruptcy case” or “putting you on the spot” for subscription services, that is, payment in equal monthly installments, regardless of whether the service was provided that month or not.

And some more useful tips for bankruptcy

1. Do not tell banks or collectors that you are collecting documents for bankruptcy. Do this quietly and calmly, buying time to file an application with the court. Once the application is accepted and assigned the number that will appear on the court's stamp of acceptance of your application, tell everyone who is demanding money this case number and inform them that you are in bankruptcy proceedings. Any, even the most illiterate creditor knows that now he has no right to communicate with you and demand payment of the debt, except through the court.

2. Do not hide anything from the financial manager and, of course, do not deceive him. Any doubts about your sincerity, and even more so revealed deception, can have a very negative impact on decisions in your case.

3. If you have debts and you have made a major transaction, for example, selling an apartment, record what you spent the money on. If you spent it to pay off creditors, then distribute the money evenly among all creditors.

4. Remember that a citizen’s lack of property will not interfere with the procedure

bankruptcy and write-off of all debts. After all, a bankrupt is bankrupt because he has nothing to pay his creditors with.

5. Today there are many so-called “debt-lovers”. These are those who promise to free you from debt for 20-30% of your debt by buying them from banks. Be careful, they may be scammers. As a rule, after several months of periodic payments to these companies, the debtor learns that the debt has not been repaid and the money cannot be returned. Therefore, spend your hard-earned money usefully - declare yourself bankrupt by legal means!

“ The public reception of the newspaper “Chance” is your reliable assistant in finding the right and safe way to get rid of debts. Together we will analyze your situation, expose the debtors, consider the prospects for your bankruptcy, calculate and justify your possible costs. After our consultations, it will be difficult to deceive you! We are waiting for you at the address: Abakan, st. Kati Perekreshchenko, 13, tel.: 8-902-996-88-91, 8 (3902) 23-23-77. All consultations are free.

Tasks of a financial manager

As soon as he receives a bankruptcy case, he convenes a meeting of creditors to whom the citizen owes. The applicant himself does not have to participate in the meeting. If he does not wish to attend, he writes a corresponding statement to the manager. The applicant does not have to delve into the essence of this process; the manager will play the role of mediator between the creditors and the debtor.

What does the financial manager do after the first court hearing:

holds a meeting of creditors, listens to their objections and proposals, and further interacts with them during the bankruptcy process of an individual;
takes measures to preserve the declared property of the debtor, and also searches for possible hidden property of a potential bankrupt;
initiates an expert assessment of the value of the applicant’s own property;
analyzes the financial condition of the applicant;
identifies possible signs of fictitious bankruptcy;
controls the restructuring if a corresponding court decision is made in the future.

The citizen is obliged to submit additional documents at the request of the financial manager. You should pay attention to an excerpt from Article 213.9, paragraph 9 of the Law on Bankruptcy of an Individual:

Concealment of property, property rights or property obligations, information about the size of property, its location or other information about property, property rights or property obligations, transfer of property into the possession of other persons, alienation or destruction of property, as well as illegal interference with the activities of a financial manager, in including evasion or refusal to provide information to the financial manager in cases provided for by this Federal Law, transfer to the financial manager of documents necessary to fulfill the duties assigned to him, entails liability in accordance with the legislation of the Russian Federation.

Who is suitable for simplified bankruptcy?

To understand who has the right to apply for extrajudicial bankruptcy, you need to read the text of the amendments; the text of the amendments to bill No. 792949-7 can be found here.

Below I will list them in a simple and understandable form.

Conditions for simplified bankruptcy:

The amount of debt is from 50 to 500 thousand rubles.
A citizen has outstanding debts from bailiffs. In other words, there is nothing to take from him and the bailiffs recorded this.

As you can see, the list is quite large, and it’s not easy to sort it out. At the end of the article, our bankruptcy specialist will tell you more about this in the video.

If all of the above conditions are met, then you can declare yourself bankrupt and use this innovation to write off your debts.

Before making the important decision to declare yourself bankrupt, take the time to get a free consultation with lawyers in order to avoid irreparable risks.

About restructuring

The financial manager, together with creditors, preliminarily draws up a restructuring plan. This is a new debt repayment schedule, adapted to the financial capabilities of the citizen.

Article 213.12 paragraph 7 of the Law on Bankruptcy of Individuals

No later than five days before the date of the court hearing to consider the citizen’s bankruptcy case, the financial manager is obliged to submit to the court a report on his activities, information about the citizen’s financial condition, minutes of the meeting of creditors at which the draft plan for restructuring the citizen’s debts was considered, with documents attached, defined by paragraph 7 of Article 12 of this Federal Law.

But the restructuring applies only to those citizens who can comply with the assigned plan. A citizen who is assigned a restructuring must meet the following requirements:

he has a source of income at the moment;
he has no unexpunged or outstanding conviction for economic crimes;
the citizen has not been declared bankrupt over the past five years;
there was no restructuring plan for this debt for eight years.

The law does not indicate the specific amount of income of the applicant that can ensure the repayment of loans according to the new restructured schedule. But it is worth understanding that if a citizen’s income is low, and it is clear that he still cannot cope with the payment, the restructuring will not apply to him. The income received and monthly payments must be proportionate, and the person must have a means of subsistence.

The financial manager supports the drawn up restructuring plan with a package of documents, which includes certificates of the citizen’s income and information about all accounts payable. Based on the results of the consideration, the court may accept the plan, postpone the case if it is necessary to finalize the plan, or refuse to carry out restructuring and initiate the next stage on the path to bankruptcy - the sale of the debtor’s property.

Sale of the debtor's property and declaring him bankrupt

If the court finds debt restructuring impossible, then in fact this means that the citizen is declared bankrupt. Now comes the moment of confiscation and sale of the debtor’s property, for which the court allots six months. During this time, the citizen is prohibited from traveling abroad. All property is included in the bankruptcy estate, but there are exceptions. According to the Civil Code, the following property of the debtor cannot be seized:

the only facility for a citizen to live;
a plot of land on which a house stands, which is the only dwelling;
personal belongings, furniture, clothing;
domestic animals and livestock;
prizes and winnings;
upon application, all property whose value is below 10,000 rubles can be excluded from the estate;
items necessary for the professional activities of the debtor;
vehicle if the citizen is disabled.

Everything else is included in the property mass. In addition, the ban on the sale of a single home does not apply if this home serves as collateral for a loan. The financial manager is responsible for the sale of property, and he also monitors the safety of this property. After this procedure, the citizen is released from all debt obligations and is finally declared bankrupt.

Sale of property (Article 213.24 of the Federal Law “On Insolvency (Bankruptcy)”)

At this stage, everything happens the same as at the previous one, with the exception of some points:

— The property identified by the financial manager is included in the bankruptcy estate; — The property is being sold; — Funds are distributed among creditors. — After the financial manager submits a report to the court on the sold property, a ruling is made by which you are released from all obligations.

Consequences for the debtor and his relatives

For five years after a citizen is declared bankrupt, he cannot receive other bank loans. Also, during this period, he can no longer apply to the court to declare himself bankrupt again. For three years, a citizen cannot hold positions in the management bodies of a legal entity, nor participate in the management of organizations.

The debtor's relatives are not affected by his bankruptcy in any way. But if we are talking about the debtor’s spouse, then certain problems arise when selling property acquired during marriage. There will be an allocation of the spouse's share.

What are the consequences for a citizen who has gone through the procedure of selling property?

After completing the property sale procedure, the citizen:

is obliged to report the fact of his bankruptcy during the next 5 years when receiving credits or loans;
does not have the right to file for re-bankruptcy within the next 5 years;
for the next three years does not have the right to hold positions in the management bodies of a legal entity or otherwise participate in the management of a legal entity.

Creditors of a citizen in respect of whom the procedure for the sale of property has been completed with the release of the citizen from obligations have no right to demand that the citizen pay debts. Even if a citizen, after bankruptcy, significantly improves his financial situation, for example, has large incomes, acquires expensive real estate and cars, creditors will not be able to foreclose on them.

An analysis of the provisions of the Bankruptcy Law shows that the bankruptcy procedure is, although complex, a promising mechanism for helping a citizen who finds himself in a difficult financial situation. At the same time, the law also protects creditors from unscrupulous debtors who deceived creditors when concluding contracts or hid their property. Taking this into account, for the effective use of bankruptcy mechanisms, a citizen who intends to use them needs the help of qualified specialists in the field of bankruptcy. Declaring oneself bankrupt without prior preparation can result in a double loss for a citizen: he will not only spend money on the bankruptcy procedure, but will also not achieve release from obligations.

FINEXPERT 24 lawyers have many years of experience in the field of bankruptcy and are ready to undertake full support of the procedure, from preparation to implementation of all measures established by the court. We provide a free consultation that includes a financial analysis. We send requests to departments, prepare a package of documents and represent the client’s interests in court and at a meeting of creditors. Our lawyers offer competent and exclusively practice-tested methods that allow us to obtain the most beneficial result for the client.

How much does bankruptcy of an individual cost?

The cost of the bankruptcy procedure cannot be stated with certainty; it may vary depending on the case. But you can focus on the following numbers:

The state fee for filing an application with the Arbitration Court is 6,000 rubles.
Payment for the services of a financial manager - 25,000 rubles.
Payment of postage costs associated with the dialogue between the financial manager and creditors - 1000-1500 rubles.
Entering information into the EFRSB - for one case - 1800-3600 rubles.
Publishing a note in the Kommersant newspaper - 7,000 rubles.

As a result, the procedure can cost approximately 40,000-45,000 rubles. If you hire a lawyer, his services will cost another 10,000-20,000 rubles.

Cost of personal bankruptcy

In addition to restrictions and a damaged reputation, you will have to pay for the bankruptcy procedure with very real money. Even before filing an application with the court, an individual must:

pay the state fee - 300 rubles (clause 5 of Article 333.21 of the Tax Code of the Russian Federation);
provide a deposit of 25,000 rubles to pay for the services of the manager (clause 4 of article 213.4 of law No. 127-FZ).

Other expenses that will need to be paid during the bankruptcy procedure:

Postage costs average from 1000 to 5000 rubles.
Publication of information in the Kommersant newspaper. Their number will depend on the progress of bankruptcy. The cost of one ad is approximately 11,000 rubles.
Publication of bankruptcy information in the Unified Federal Register. Their number also depends on many factors - the number of creditors, stages of bankruptcy, sale of property. On average, 5-7 advertisements will be required. One publication for an individual will cost about 400 rubles.
Additional payment for the services of the manager - 25,000 rubles for each stage of bankruptcy. The manager will also receive from 3% to 7% of the amount of repaid creditors’ claims.
Payment for the services of other persons engaged by the manager.

Even the “cheapest” bankruptcy of individuals will cost at least 50,000 rubles. However, few people will be able to do without the services of a law firm. First, you will need to draw up a competent and substantiated application, send all the necessary letters, meet deadlines and understand the stages of the procedure.

Many law firms offer . The cost is determined based on the amount of debt and other circumstances, but usually is at least 60,000 rubles. That is, getting rid of a debt of 500,000 rubles will cost no less than 20% of its amount, and this is far from the limit.

Therefore, many “ordinary” debtors simply cannot take advantage of this opportunity, since they are not able to pay it.

The lion's share of bankruptcy cases is related to loans and borrowings. It often turns out that in order to resolve the issue with existing debts, the borrower needs to take out another loan. And doing this with a high debt load and the presence of arrears is very difficult.