CrimeaPRESS reports:
Step-by-step instructions on how to declare bankruptcy in 2023, providing 2 procedures to solve debt problems https://financentr.ru/blog/restrukturizaciya-dolga-pri-bankrotstve. One of them is restructuring. This is the name of the process of reviewing a citizen’s obligations in order to ease the financial burden. This mechanism allows the borrower to reconsider the terms of debt repayment and adapt them to the current financial situation.
When can a court refuse a procedure?
If the debtor decides to submit an application to the MFC, and the case will be considered out of court, then no development of a new schedule is provided. However, during a judicial procedure, this is one of the stages of the process. It is good because after it there are no consequences of bankruptcy. But sometimes the court may refuse to review debt obligations. This happens in several cases:
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Lack of evidence of a financial crisis. The debtor must document his financial difficulties. Without appropriate evidence, a request for review of payments may be rejected.
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Artificially creating financial difficulties in order to declare oneself bankrupt. If the borrower tries to manipulate his situation in order to obtain preferential terms, the court will not only refuse to consider the case, but also impose a penalty.
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Refusal of the potential bankrupt to cooperate. If the borrower does not reach an agreement with creditors or does not provide the necessary documents and information, the restructuring will not be introduced.
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Violation of the rules of bankruptcy procedure. Failure to comply with established procedures and rules when carrying out restructuring may lead to its failure.
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Unsatisfactory financial plan. Lack of a clear and convincing financial plan confirming the possibility of repaying the debt. But this requirement applies, rather, to the financial manager, and not to the debtor.
Types of restructuring
The bankruptcy procedure provides several options for debt relief as part of restructuring.
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Credit holidays. Providing a temporary period during which the borrower is relieved of the obligation to repay debts.
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Reducing the interest rate. Reducing the interest rate on a loan in order to reduce monthly payments.
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Extension of repayment period. Extending the debt repayment period to reduce monthly payments.
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Partial debt write-off. Reducing the total amount of debt to be repaid.
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Individual conditions. Development of unique restructuring conditions that take into account the specific circumstances of the borrower.
Personal bankruptcy restructuring is a mechanism that provides borrowers with the opportunity to renegotiate debt repayment terms and prevent serious financial consequences. But it requires honest communication with creditors and the development of a sound financial plan. Before filing an application, find out how to declare yourself bankrupt, study the instructions, reviews, and consult with lawyers. This will help you be prepared for any surprises.
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