EXTRAJUDICIAL BANKRUPTCY PROCEDURE WILL BE ACCESSIBLE TO THE CITIZENS FROM SEPTEMBER

Last Tuesday, the State Duma adopted a draft law providing for the possibility of extrajudicial bankruptcy of individuals in the second and third readings.

Initially, the initiative was announced due to the financial inaccessibility of carrying out the current procedure for a number of citizens who actually found themselves in a difficult situation.

The draft law provides for the possibility of free bankruptcy by submitting an application by the citizen himself/herself to the MFC. To initiate the procedure, two conditions should be complied:

-          the total amount of debt should vary between 50,000-500,000 rubles;

-          the bailiff must return the writ of execution against the debtor due to the lack of property.

The application should contain information about the debtors and the amount of debts to each of them - the accrual of penalties will be stopped for these debts in case the application is accepted by the multifunctional center and the bankruptcy procedure is opened.

The procedure will last six months; within six months, the creditors will have a wide range of opportunities to find the debtor's property and will even be able to transfer the bankruptcy to the judicial case if such a property is not indicated in the application or the amount of the debt indicated to them is deliberately understated.

During the procedure, the debtor will be prohibited from taking new loans and borrowings, as well as concluding surety agreements.

Upon the expiration of the specified period and in the absence of any obstacles, the debts of the citizen will be recognized as hopeless and written off.