THE SUPREME COURT OF RUSSIA: THE DEBTOR HAS A RIGHT TO BANKRUPTCY EVEN IF HE IS GUILTY OF CRIME

An individual initiated his own bankruptcy procedure in a situation of having the only debt to the state for a crime committed earlier. The courts of three instances terminated the proceedings on the application, citing the unlawfulness of the actions of the debtor himself and the absence of other creditors, but the Supreme Court of Russia canceled the decision, sending the case for reconsideration.

The initiator of bankruptcy case was a woman found guilty of a crime - illegal organization and conduct of gambling.

Within the framework of the criminal case, a claim to collect in solidarity from her and other defendants in the case over 338 million rubles to the income of the Russian Federation was satisfied.

By terminating the bankruptcy proceedings of the debtor, the courts of first and appellate instances based their position on the unlawfulness of the applicant's actions. According to the judges, the arisen debt is a sanction for unlawful behavior and cannot be taken into account when determining the signs of insolvency.

The District Court concluded that the applicant could apply for bankruptcy, regardless of the nature of the debt, but the insolvency procedure is not intended to unjustifiably avoid financial responsibility.

Considering the complaint of a failed bankrupt debtor, the Supreme Court concluded that at the stage of filing an application, the arguments voiced by colleagues should not have been considered, since the law does not establish such restrictions for a citizen filing an application for insolvency.

The question of whether the debtor can be relieved of his existing financial obligations should be resolved in the process of considering a bankruptcy case, but not at the stage of making a decision on its initiation (court ruling of May 18, 2021 No. 301-ES20-19192).