Supreme Court of Russia will clarify the procedure for initiation of bankruptcy of an individual by bank

The case of the insolvency procedure of an individual was transferred for consideration of the Supreme Court of the Russian Federation. The potential bankrupt expressed his disagreement with the debt presented to him, and the lower authorities supported him.

The position of the individual was that the debt presented to him by the bank was not indisputable, therefore, could not become the basis for initiation of a bankruptcy case without a judicial act that has entered into legal force.

During the consideration of the case in the court of first instance, the potential debtor filed an application to terminate the proceedings on the claim, and the judge satisfied his request.  The district court and the court of appeal supported the decision of judge. 

Despite this, the bank made a decision to fight and filed a complaint with the Supreme Court of Russia.

The position of the lower courts was that the claims made by the bank were not indisputable, and there was a disagreement between the parties about the right, which should have been resolved outside the bankruptcy case.

The opinion of the bank boiled down to the fact that the lower authorities interpreted the bankruptcy legislation incorrectly, which allowed credit institutions to initiate the process of insolvency of their debtors without arrears.

The Economic Board is about to understand the intricacies of the current situation on December 20 this year.