ADVANTAGES AND DISADVANTAGES OF EXTRAJUDICIAL BANKRUPTCY

Daria Zakharova, a lawyer of the Borodin & Partners legal company, prepared an analytical material about the forthcoming extrajudicial bankruptcy procedure for Rusbankrot.

Bankruptcy of citizens is perhaps the most popular legal service in Russia. However, the cost of bankruptcy for an ordinary citizen is rather high - the minimum costs start from 30-60 thousand rubles (and this is provided that the debtor will not attract lawyers and pay extra for the services of a financial manager).

The number of citizens who want to use this service is pretty big. At the same time, insolvency officers are often reluctant to agree to such procedures due to the fact that the opportunities for earning money are legally limited and few are ready to pay for the work of the insolvency officer.

Bankruptcy of citizens has become a problem for the courts as well - such cases belong to the jurisdiction of the commercial courts, which, as a rule, are overloaded (especially in capitals).

Therefore, the possibility of bankruptcy without the control of the court and the insolvency officer began to be discussed almost immediately, as the amendments on the bankruptcy of citizens entered into force. The crisis and the predicted wave of bankruptcies of the citizens became the impetus for the resumption of this discussion and consideration of the draft law in the State Duma of the Russian Federation (now the draft law has already passed the second reading).

In my opinion, the advantages of such a procedure are its availability. We have simplified the criteria for declaring a citizen bankrupt - previously, many could not afford to use this procedure due to the significant “entry threshold” into the procedure (from 500,000 rubles).

Now it is available to the persons with debts ranging from 50,000 to 500,000 rubles, the debts of whose are essentially hopeless to be recovered.

In addition, the procedure of filing for bankruptcy has been simplified. In fact, a citizen needs to submit an application and a list of creditors known to him to the MFC, which is much easier than filing a bankruptcy petition in court, where a large number of certificates and documents collected no later than 30 days before filing an application are required to initiate a case. What is more, the law stipulates that the procedure is free for citizens, as it does not require the participation of an insolvency officer and payment of fees.

The disadvantage is that the law does not clearly spell out the procedure for transferring the procedure from extrajudicial to judicial. Thus, the law does not say anything about the situation when the citizen himself acts in bad faith. It turns out that even if a citizen gets a loan without intention to repay them, or has become a debtor due to his own unfair actions (for example, as a result of bringing him to subsidiary liability or recovery of damages), the debt cancellation is still guaranteed to him.

If now the debt’s cancellation is possible only if the debtor behaves in good faith during the formation of debt and in the bankruptcy procedure, currently, it is being made independent of any of these conditions (except for a narrow range of legislative restrictions).

I believe that in this form, extrajudicial bankruptcy can generate a certain number of people who want to enrich themselves at the expense of the credit institutions.

In general, it turns out that creditors do not have many levers of influence on the debtor in this procedure - there are not so many reasons for transferring the situations under the control of the court. It is inevitable that unscrupulous debtors will take advantage of this.