Law: Individuals can also be declared bankrupt

The President signed the Law “On insolvency”.

Signs of insolvency include:

ꞏ temporary insolvency - inability to fulfill an obligation within 3 months (inability of a city-forming enterprise and enterprises equivalent to it to fulfill it - within 6 months);
ꞏ insolvency - when the debtor’s obligations exceed the value of his assets in the reporting period on the date of applying to the court and at the beginning of the year in which the application was filed.

Insolvency cases will be considered by the court.

The debtor, like the creditor, has the right to apply to the court for recognition as insolvent in connection with the failure to fulfill the debtor’s financial obligations.

If there are signs of insolvency, the state tax service, state statistics bodies are obliged to provide the competent state body with information about enterprises with a state share in the authorized capital.

The interests of all creditors are represented by a meeting of creditors or a committee of creditors when initiating insolvency proceedings.

The law provides that individuals can also be declared bankrupt. Previously, the legislation did not provide for such procedures.

An insolvency applicant who has filed an insolvency claim against an individual shall make an advance payment of 7 times the minimum wage to be paid to the financial manager to the court’s deposit account.

In summary insolvency proceedings, unless otherwise agreed with the debtor, the court administrator’s labor costs shall be reimbursed by the applicant who filed an application for initiation of insolvency proceedings against the debtor.

In this case, an advance payment in the amount of 7 MPL for the remuneration of the court administrator is paid into the deposit account of the court. The Court Administrator is paid for each completed case.

Pre-trial rehabilitation of the debtor with the assistance of the state is introduced for a period of 12 to 24 months. With the assistance of the state, the pre-trial sanation procedure may be canceled due to its recognition as ineffective.

The insolvency case must be considered at a court session within a period not exceeding 2 months from the date of the ruling on accepting the application for bankruptcy proceedings. In some cases, the consideration of the insolvency case may be extended for a period not exceeding 1 month.

Court documents in case of insolvency must be executed immediately.

It is not allowed to levy execution on the pledged property until the court makes a decision on approval of the plan for structural change of the citizen’s debt or decision on declaring the citizen bankrupt and initiating the procedure for the sale of his property.

In the event of an improvement in the property situation of an individual, the meeting of creditors has the right to apply to the court with an application to amend the plan for structural change in the debt of an individual.

With the entry into force of this law, the Law “On bankruptcy” of May 5, 1994 will become invalid.