Bankruptcy is understood as the inability of the debtor to pay off his debts. The decision on declaring the debtor bankrupt is made only by the arbitration court. Accordingly, fictitious bankruptcy means obtaining such a decision if the debtor has the opportunity to pay off the debts accumulated by him.
Since such actions are carried out only with the aim of obtaining additional benefits, for example, in order not to fulfill the monetary requirements of the lender, they are criminally punishable and are qualified under Art. 197 of the Criminal Code. In simple terms, the debtor is trying by this procedure to simply illegally appropriate the creditor’s money.
The very concept and signs of bankruptcy are described in Federal Law No. 127- dated 26.10.10.2002 “On Insolvency (Bankruptcy)”. This law gives a clear definition in which case the debtor is declared bankrupt: if within three months he is unable to fulfill a monetary obligation, and his debt is more than 100 thousand rubles.
Responsibility
It can be administrative and criminal, depending on the amount of damage caused.
Due to the fact that Art. 197 of the Criminal Code, among other things, provides for criminal liability in the form of imprisonment for a term of 6 years, then such litigation in court proceedings are rare. And I want to believe that this is still the case. But there is, of course, another option: the fact of fictitious bankruptcy is difficult to prove. As a rule, when preparing for such bankruptcy, the owners reset the company accounts, transferring their assets to one-day companies or companies registered with relatives and acquaintances. Unfortunately, the mechanisms of fraud have been worked out for a long time, and it can be very difficult to prove intent. Most often, criminal proceedings are instituted for fraud.
In Art. 197 of the Criminal Code with comments states that criminal liability for this crime comes from 16 years.
Signs
Denote the main ones:
- goods are purchased at a clearly inflated price;
- accounting records non-existent data in loan debt (for example, interest is overstated);
- part of the property is hiding;
- current income is transferred to other items, such as future income;
- future expenses, on the contrary, are carried forward.
If lenders have doubts about the legality of the bankruptcy procedure, they are entitled to request a bankruptcy examination. Its conclusion reflects not only the characteristic features that indicate intentional or fictitious bankruptcy, but also the possibility of restoring solvency.
Who can act as creditors?
Creditors in insolvency litigation are not necessarily legal entities. They can also be individuals or a government agency (e.g., Tax). Most often, the IFTS acts as the plaintiff in such cases, trying to prove that the procedure was carried out with violations in order to evade taxes - often without foundation.
Who can be declared bankrupt?
Since 2015, not only legal entities and individual entrepreneurs, but also individuals can be declared bankrupt. Moreover, not only he, but also a credit institution, to which this person has monetary obligations, can submit a petition for declaring an individual bankrupt.
Accordingly, since an individual can be declared bankrupt, then in this case there may also be a fictitious bankruptcy. The punishment for him is the same as for a legal entity. If the amount of damage is small, then the liability will be administrative, according to Art. 14.12 Administrative Code in the form of a fine of 1,000 to 3,000 rubles. In cases where the amount of damage exceeds one and a half million rubles, then liability will be brought under Art. 197 of the Criminal Code.
In practice, citizens rarely use this procedure. And fictitious bankruptcy is almost never encountered among individuals. There are several reasons for this:
- many citizens simply do not know about the possibility of declaring themselves bankrupt (this is especially true for the least protected segments of the population - pensioners and disabled people);
- the high cost of bankruptcy proceedings - payment of state fees, remuneration to the arbitration manager and other smaller payments;
- refusal of financial managers even for a fee to conduct bankruptcy proceedings persons: in fact, for the same amount of work, payment from legal entities persons are much higher and the result is visible much better, because citizens sometimes don’t have any property at all to cover at least part of their debts.
Conclusion
Fake bankruptcy should not be confused with deliberate. Under intentional refers to the actual bankruptcy of the organization as a result of deliberate actions (inaction) of the head.
In general, the bankruptcy procedure is one of the tools of modern business, but any action always has a downside. A manager who is ready to take risks associated with fictitious bankruptcy should remember that if this fact is revealed, he will lose not only his company, but also his personal property, and possibly freedom.