The procedure of bankruptcy might become free of change

The various proposals and opinions were discussed during this time. The draft law provoked approvals and rejections, but finally it approached the finish line – now it is being prepared for a second reading in the State Duma.

According to the latest version, the Ministry of Economic Development proposed to exclude arbitration managers from the bankruptcy proceedings in some cases. Instead of this, multifunctional centers (MFCs) may appear. 

We should remind our readers that initially, the work on improving the mechanism of bankruptcy of individuals began due to the inefficiency of the existing mechanism, which is long, expensive and therefore unaffordable for the bankrupts themselves.

The proposal to remove the managers from the scheme has the same reason; it is proposed to make the appeal to the MFC free of charge. Such a bankruptcy petition may become possible for individuals with the debts from 50,000 to 700,000 rubles (the limit of 500,000 rubles was designated before).

However, the Association of Banks of Russia (ABR) has already spoken out against the amendment, noting that the rejection of managers will lead to more expensive procedures for creditors, as well as the abuse by debtors.  The manager in this scheme acted as a kind of filter. He or she assessed the compliance of a particular situation with the letter of the law, and after that accepted or did not accept a bankruptcy petition.  In addition, ABR proposes to lower the upper limit of the debt of alleged bankrupts to 250,000-500,000 rubles, as well as introduce the legal consequences of bankruptcy (previously, a citizen had no right to obtain loans from banks for 5 years after the bankruptcy)