Krympress reports:
What is the procedure for bankruptcy of individuals
Bankruptcy of individuals is a legal procedure that allows a citizen to recognize himself financially insolvent and get rid of debt obligations. This mechanism is regulated by the Federal Law “On Insolvency (Bankruptcy)” and provides the debtor with the opportunity to restructure or fully write off debts if he cannot repay them. Many are interested in this topic and seek information by studying Bankruptcy of individuals reviewsTo understand how the procedure goes into practice. In this material we will voice the main points.
When resorting to bankruptcy
The bankruptcy procedure resorts to the following cases:
- The total amount of debt to creditors exceeds 500,000 rubles.
- The debtor is not able to fulfill his financial obligations for more than 3 months.
- There are significant delay in payments of loans, loans, alimony or utility bills.
- There is a risk of loss of property due to enforcement proceedings.
Is it possible to declare yourself bankrupt of your own free will
Yes, the bankruptcy of individuals can be initiated by the debtor himself if he understands that he is not able to fulfill his financial obligations. However, the procedure can be started at the request of creditors or tax authorities, if the amount of the debt exceeds the established threshold.
What gives bankruptcy to an individual
The main advantages of the procedure:
- Full or partial debt write -off.
- Stopping fines and penalties.
- Continuation of pressure by creditors and collectors.
- The opportunity to start financial life with a clean sheet.
However, bankruptcy imposes some restrictions:
- For 5 years, it is impossible to re -initiate bankruptcy.
- For 3 years, it is forbidden to occupy leadership positions in companies.
- For 5 years, it is necessary to indicate the fact of bankruptcy upon receipt of new loans.
Who is engaged in bankruptcy procedure
The bankruptcy procedure of individuals is carried out by the arbitration court, and the financial manager plays the key role in it. This specialist controls the process, analyzes the financial condition of the debtor, conducts the sale of property and distributes the received funds between creditors.
How complicated the bankruptcy procedure is
The process of bankruptcy can take from several months to a year and includes the following stages:
- Application of an application to the arbitration court.
- The appointment of a financial manager.
- Analysis of property and financial position of the debtor.
- Property or approval of a settlement agreement.
- The completion of the procedure and the debt is written off.
Common myths about bankruptcy of individuals
Myth 1: After bankruptcy, a person will be left without property. True: the law protects the minimum necessary property — the only housing (if it is not laid down), personal items, food, household appliances and essential items.
Myth 2: Bankruptes are prohibited from traveling abroad. True: restrictions on exit can be introduced only in exceptional cases by court decision and during the procedure itself. After the completion of bankruptcy, the ban is removed.
Myth 3: After bankruptcy, you can’t take loans anymore. True: the restriction is valid only 5 years, and then a person can again receive loans. However, in practice, banks are careful about former bankruptes.
Myth 4: Bankruptcy is a shame and the end of financial reputation. True: bankruptcy is a legal way to get out of the debt pit, not a crime. In some cases, this is even the best option than endless delays and enforcement proceedings.
According to experts, bankruptcy of individuals is an effective mechanism for leaving a difficult financial situation. Despite certain restrictions, it allows the debtor to get rid of debts and start financial life from scratch. The main thing is to study the process in advance, consult with lawyers and weigh the pros and cons of before making a decision.
Note that the procedure for bankruptcy of individuals in Russia can take from 4 months to 1.5 yearsand in some difficult cases — even longer. Dates depend on several factors:
Method of bankruptcy
There are two main routes of bankruptcy that differ in terms of time:
- Simplified bankruptcy through the MFC (if a debt is up to 1 million rubles)-3-6 months.
- Through the arbitration court (if the debt is more than 500 thousand rubles) — from 6 months to 1.5 years.
Quantity and type of debt
- If the debtor has many creditors, the procedure will delay, since each creditor has the right to file claims.
- The presence of pledge property (for example, a mortgage) complicates the process, since the court will deal with the pledge separately.
The activities of the financial manager
The financial manager analyzes the debtor’s transactions over the past 3 years, which may take time. If suspicious transactions are identified (for example, a fictitious transfer of property to relatives), the procedure will be delayed.
The complexity of the sale of property
- If the debtor has no liquid property, the process goes faster.
- If you need to sell real estate or cars, bankruptcy is delayed due to trading.
Interaction with the court and creditors
- If lenders actively dispute bankruptcy or require the inclusion of requirements in the register, the court may postpone the consideration of the case.
- If the debtor provides all documents in a timely manner, the process goes faster.
Ideally, the procedure occupies 6-12 months. If there are no property and active objections from creditors, the process can be completed in six months. In difficult cases with contesting transactions and the implementation of assets — before 1.5 years and longer.
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