A person, as a rule, plans his life, incomes and expenses, but sometimes unforeseen situations or trivial miscalculations in financial opportunities occur, and then the citizen faces a number of intractable problems. In this case, they ask themselves questions about how to pay debts, how not to remain without housing, work and livelihoods. Instead of advertising banners about quick loans and borrowings, letters from banks and collectors with threats appear. A person and his relatives begin to attack with calls, they frighten with unpredictable consequences. These actions are intended to undermine the mental state of the debtor. Lenders drive a citizen into a debt hole.
Three years ago, a law was adopted on insolvency of citizens, which is currently the main way to solve the problems of their insolvency. Now the answer to the question of how to file for bankruptcy of an individual is sought by many citizens of our country who have burdensome debts. In fact, only one percent of them have already taken advantage of the legal possibility of exempting from the credit burden. Consider the pros and cons of bankruptcy of individuals.
Steps to Liberation
This procedure is a laborious process for a citizen. As a rule, people seek help from lawyers for professional assistance. After all, even filing a lawsuit requires not only knowledge of jurisprudence, but also the practice of doing business in court.
A citizen himself can begin the process of recognizing his financial insolvency, owing more than half a million rubles to organizations and citizens and not servicing obligations (not making payments) for more than one quarter. According to the Law on Bankruptcy of Individuals, the creditors of the debtor and even the tax inspectorate have the right to start this process. Bankruptcy petition can be filed with less debt. A case on it will be launched if the total debt is not covered by the value of the property of the citizen.
Citizen bankruptcy proceedings may be initiated once every five years.
To answer the question of how to file a bankruptcy of an individual, it is necessary to talk about several main stages. We list the main ones:
- Collection of documents confirming the insolvency of an individual. All requested data is provided for a three-year period, the beginning of which is the date of filing the application with the court.
- Registration and filing of bankruptcy of an individual.
- Implementation of the decision of the arbitral tribunal.
- Recognition of a person insolvent. This stage means that the creditors recognized the citizen as incapable of securing their obligations and stopped demanding to pay them off. All measures to repay the claims have been implemented. This is the essence of the law on bankruptcy of individuals.
List of bankruptcy documents
What data must be provided to a person to be declared bankrupt? According to the federal law of 26.10.2002 127- "On insolvency (bankruptcy)", the debtor needs to prepare the following papers:
- Documents confirming human obligations (loan agreement, receipt).
- Citizens insolvency data (income statements, statements from all available bank accounts).
- Extract from the USRIP. It confirms the presence or absence of the status of an entrepreneur in the debtor. Help is relevant for five days.
- Lists of creditors with personal data, addresses, details and amount of obligations.
- A list of all available property, including mortgaged, indicating the address of its location.
- Title documents for property (including intellectual property).
- Copies of documents confirming the sale of real estate, vehicles and other contracts worth more than three hundred thousand rubles.
- Extract from the register of shareholders, provided that the bankrupt citizen is a member of the legal entity.
- Copy of certificate TIN, SNILS.
- Copy of documents on marriage or divorce, prenuptial agreement (if any), judicial agreement on the division of joint property of spouses.
- Copy of the birth certificate of the child (ren).
- Information on the state of the personal account of the person subject to compulsory insurance, a resolution on the status of unemployed.
- Other documents for the bankruptcy of an individual, confirming the circumstances and proving statements of the future bankrupt.
Only after collecting all these papers, the debtor can begin this procedure. However, this is only a short mandatory list of documents for bankruptcy of an individual.
Ways to implement bankruptcy proceedings
The issue of citizen insolvency is resolved in three ways. All of them are described in detail in Law No. 154 "On the Bankruptcy of Individuals". We will tell you more about them:
- Debt restructuring. In this procedure, lenders take note of the debtor’s capabilities and draw up an updated payment schedule. Unless, of course, a citizen is ready to pay the debt, simply on other conditions.
- The sale of all bankrupt property.
- Peace treaty. It can be concluded if the debtor and the creditors were somehow able to agree with each other.
A look at debts from a different angle
If individuals satisfy the following conditions, then they have the right to apply for a debt restructuring procedure:
- Availability of official income. The monthly income of a citizen must exceed the amount of the required monthly payments to pay off obligations. The debtor should be able to exist on these incomes, to pay for his food, accommodation, and maintenance of children.
- Lack of criminal record for economic crimes (fictitious bankruptcy, fraud).
- Non-recognition previously bankrupt.
The bankruptcy procedure of an individual is one of the restoration measures and helps the citizen to maintain his solvency with limited costs. Thus, this is a change in the terms of servicing existing obligations (interest rates and maturities) as agreed with creditors. There is no increased interest on revised debts, banks do not impose other financial sanctions (penalties, fines), and cancel requirements for securing debt. The maximum debt repayment period under the debt restructuring procedure is three years.
This procedure is beneficial for the debtor citizen, as it:
- allows you to pay all creditors without charging huge fines and penalties;
- to avoid the stage of sale of property of an individual bankrupt.
Find and sell
The sale of property in the event of bankruptcy of individuals means a set of legal actions focused on the search and sale of property of the debtor. The financial manager is involved in this process, receiving all legal rights to dispose of his property. Transactions made without his participation are invalid and retroactive. The law provides a procedure for challenging transactions of future bankrupt. Therefore, debtors are not able to re-register (fictitiously sell) property to third parties (relatives or closest friends). Bailiff services do not participate in the insolvency procedure.
How is the property of the debtor sought?
- The debtor is obliged to provide all available data on the property (real estate, vehicles, land, securities). Concealment of property will adversely affect the result of a bankruptcy of a citizen up to its full challenge.
- The manager sends letters to all registering authorities to obtain information about the property of the debtor citizen.
- The manager checks the debtor's place of residence for valuable items (household appliances, computers, cell phones, luxury goods, cash).
When selling property in the event of bankruptcy of individuals, everything is independently described by the arbitration manager. He carries out an assessment and sends to the court documents on the sale of objects. Simultaneously with the assessment, the financial manager prepares a document on the procedure for the sale of property for approval during the court session.
Bankruptcy property of a debtor can be sold in two ways:
- Direct sale for items, things, worth not more than one hundred thousand rubles. Funds from the sale of property make up the bankruptcy estate.
- Bidding held on special trading floors. There are certain instructions and trading rules (in particular, on the need for digital signatures). To bid, it is usually required to have a cash deposit.
Valuation of collateral is agreed with the mortgagee. Mortgaged property is sold according to the rules established by the mortgagee. Usually it sets the minimum selling price of the property. If the buyer is not at the minimum cost, the mortgagee reserves the property.
The property of the spouses acquired during the marriage is subject to sale in the event of the bankruptcy of the husband or wife. The financial manager evaluates such property (apartment, car), sells it, and the second spouse returns the funds attributable to his share in the property. If property during the marriage was donated or received by inheritance by one of the spouses, then such property is not recognized as joint.
The property of the debtor is bankruptcy estate. There are exceptions that cannot be picked up and implemented:
- The only real estate for living (apartment, room, cottage, country house, plot with a country house). No one will be able to take the last property from the debtor or deprive him of his only dwelling (the law does not stipulate the area or value of this real estate object). Own housing may be located in a different region than the place of registration or residence, but immunity from collection will apply to it. There is confirmatory judicial practice on this issue.
- Money cannot be taken from a citizen and sold in the amount of a living wage. If there are minor children, dependents, then an additional living wage is allocated to them.
- Domestic animals and livestock, various commemorative awards, honorary distinctions and orders of glory, furniture, household items, food products cannot be realized.
Resolve the issue peacefully
An amicable agreement is the most popular way to resolve a monetary dispute on terms favorable to the parties in cases of bankruptcy of individuals. The parties to the process (debtor, lenders, authorized body of authority) have the right at any time to sign a settlement agreement. It is accepted on the following mandatory conditions:
- A world deal is approved by a majority of votes at a meeting of creditors (required of all security lenders).
- The agreement concerns only the obligations described in the register of requirements for the period of the meeting. Claims that are not reflected in the register at the date of the conclusion of the world, do not have the right to satisfy and appeal. The rights of creditors not participating in the register are not violated.
- The agreement must be approved by the court. After this, the insolvency proceedings are terminated, and the citizen begins to pay off the debts according to the agreements reached.
- An amicable agreement is concluded until the citizen is declared bankrupt.
- If a settlement is violated, the bankruptcy procedure of an individual is resumed.
The conclusion of a peace treaty leads to the fact that:
- The liabilities restructuring plan and the ban on satisfying creditors' requirements are canceled.
- The powers of the manager are terminated.
- Debt repayment begins on the agreements reached.
The advantages of a settlement are obvious to both the debtor and the lenders. They are as follows:
- the parties agree on mutually beneficial conditions;
- saving time and money on both sides of the transaction.
If the terms of the amicable agreement are not fulfilled, then bankruptcy proceedings are resumed. They recognize the person as insolvent and begin to sell property and other valuable things.
How much does it cost to become bankrupt?
The Law on the Bankruptcy of Individuals implies that the debtor must independently pay for the recognition of his insolvency. The price of the procedure includes:
- Payment for publications.
- State duty in the amount of six thousand rubles. It is paid upon filing the bankruptcy of an individual in the arbitration court.
- Compensation to the arbitration manager in the amount of twenty five thousand rubles, as well as seven percent of the proceeds after the sale of the property.
If a person does not have money to pay for bankruptcy, the process will be terminated.
How long does the procedure take?
The bankruptcy procedure of an individual is quite long. We list its main time stages:
- Bankruptcy of an individual lasts at least six months. This period is established by law.
- The period from the moment the application is submitted to the decision of the court lasts from fifteen days to the quarter.
- Debt restructuring takes four months.
- Realization of the property lasts about six months.
The real term of a bankruptcy of a citizen in our country on average takes about nine months, provided that the court immediately makes a decision on the sale of property without a restructuring procedure.
Life after the trial
The following main consequences of bankruptcy of an individual are distinguished:
- Bankrupt ceases to own his property.
- A bankrupt person must report this to creditors within five years when contacting them for a loan.
- For three years a citizen loses the opportunity to occupy managerial positions in any organizations.
- The execution of creditors' claims is terminated, with the exception of obligations to pay taxes and fees, and the accrual of penalties and interest thereon.
Cancellation of bankruptcy decision
In the process of recognition of financial insolvency, nothing should give an unprincipled bankrupt to a citizen. The concealment of information about one's own property, the distortion of information about rights and obligations, the acquisition of luxury goods immediately after a citizen is declared bankrupt are arguments to challenge the bankruptcy of an individual.
For intentional bankruptcy, which has as its goal non-fulfillment of obligations, the liability of an individual is provided. According to the criminal law, such a citizen faces up to six years in prison. According to the current edition of the Bankruptcy Law for Individuals, a person named bankrupt does not have the right to issue loans for five years after that without declaring his insolvency.
back side
The bankruptcy procedure frees from burdensome debts not only of a bankrupt citizen, but also of his future heirs, who will not have to accept an inheritance in the form of unpaid loans and borrowings.
The negative aspects of declaring oneself bankrupt are possible difficulties in further employment. Although in practice this is quite rare.
Comparing the pros and cons of bankruptcy of individuals, we can conclude that the procedure is the only legal way to put an end to all outstanding issues with creditors, so that after that we can start a new life unburdened by financial problems. It is worth using the procedure for recognizing insolvency of Russian citizens if:
- You lost steadily high incomes and received additional substantial expenses;
- you do not have property or it is a subject of pledge in banks;
- in other difficult financial cases.
Bankruptcy will help to adjust life for the better. Of course, there are consequences of the bankruptcy of an individual in the form of restriction of rights, for example, deprivation of the opportunity to do business.