District court pointed out the bad faith of debtor in bankruptcy

As part of the insolvency case of the debtor (an individual), one of his creditors challenged the decision of lower courts to release the bankrupt from his debt obligations in the district court.  The applicant pointed out the unfair behavior of an individual and the lack of grounds for satisfying his claims in connection with this.

When considering the issue, the representatives of the court of first instance and the court of appeal formally noted the failure to fulfil obligations associated with the bad financial condition of the citizen. This was the reason for the release from the further fulfilment of obligations.

However, the district court listened to the position of the creditor and criticized the opinion of the judges.

The applicant referred to the fact that at the time of applying for the loan, the debtor provided false information regarding his income, and also did not take measures to repay the debt and did not disclose information regarding his earnings.

The district court reminded its colleagues that the bankruptcy of a citizen is not an instrument of relief from the debt burden, but a compromise between the debtor and his creditors. The procedure enables conscientious citizens to get rid of unsustainable debt, but should not become a tool in the hands of those who initially intend to take the money and not return it. Therefore, it is the debtor who is obliged to actively cooperate with the court, provide all the necessary information about himself, including the size and sources of his income.

The District Court made a decision to reconsider the case in the first instance (decision № F09-1882/22 of April 13, 2022 in case № A76-38538/2020).