Consequences of bankruptcy of an individual: stages of procedure, documents

October 1, 2015 there was a legislative event that gives hope for a successful resolution of the situation for citizens who found themselves in difficult financial circumstances - Federal Law No. 476-FZ of December 29, 2014 "On Amending the Federal Law" On Insolvency (Bankruptcy) "(Hereinafter - FZ). In connection with these changes, citizens who are not individual entrepreneurs, have the right to declare themselves, under certain circumstances, bankrupt. The bankruptcy of an individual is intended to contribute to a successful and, most importantly, legal resolution of a very common situation today, when due to circumstances the debtor is unable to pay one or more loans. But is the bankruptcy procedure so simple, and what are the real consequences of the bankruptcy of an individual?

Who can be considered bankrupt

Lawmakers bankruptcy procedure for citizens was originally conceived as an affordable way to solve financial problems. But still consider bankruptcy as an easy way to get rid of the debt of a credit institution, it will be wrong. To begin with, it should be clarified that not every application for bankruptcy of an individual will be accepted and considered by the court. In accordance with the Federal Law, a debtor starting a bankruptcy procedure must have a loan debt of three months, provided that the loan or their total amount is 500 thousand rubles or more. In addition, already at the stage of filing the application, it is necessary to prove the insolvency of the debtor, that is, his inability to provide the loan himself.

Among other things, the future bankrupt will need to provide documented information about their expenses, income belonging to the property as evidence of their own insolvency.

Who starts the procedure of bankruptcy of an individual

In addition to the debtor, the creditor organization itself can apply for bankruptcy. If there are several creditors, then it is possible to declare an individual bankrupt not only in case of absolute impossibility to pay off debts, but also on condition that repaying debts to one of the creditors deprives the non-payer of the opportunity to fulfill other financial obligations.

In special cases, an application for bankruptcy of an individual may be filed by a tax inspection.

Where to start the procedure of bankruptcy of an individual

How to start bankruptcy of individuals? The practice of such processes is not enough for today, but even now one can notice that it is "long and expensive" to become bankrupt.

All cases of bankruptcy of individuals, as well as cases of individual entrepreneurs, are considered in arbitration court. Under the law, a period of up to three months is established, during which the bankruptcy of individuals is established in court. Practice shows that the process can drag on for many months due to circumstances.

In addition, the very procedure of bankruptcy is not affordable for everyone. In addition to the compulsory court fee and payment for the work of a lawyer, the debtor will have to pay for the services of a financial manager.

So, in the case when the bankruptcy of individuals is inevitably inevitable, the instruction on which the bankruptcy process should begin is as follows:

• Any litigation begins in the same way - with the application. In the application for bankruptcy, it is necessary to indicate the following circumstances.
• The amount of debt with a detailed description of all components (loan amount, penalties, tax charges, debts for utility payments, etc.).
• Indication that an individual is not an individual entrepreneur - this must be confirmed by a certificate from the tax inspectorate.
• Indication that all funds were taken on credit for non-entrepreneurial purposes.
• Description of the existing property - here you also need to attach supporting documents. For the bankruptcy of an individual, you will have to provide information on the incomes available to the debtor at the moment and the inevitable expenses.
• Information about the dependents (for example, the minor children of the debtor).

Also, lawyers are recommended to describe in detail in the application (if there are such circumstances): reduction from the place of work, loss of ability to work (getting a disability) and other reasons for the deterioration of the financial situation. Of course, these facts should also confirm the relevant documents. For bankruptcy of an individual it is important to take into account all the circumstances for which the debtor is not able to pay off all credit obligations.

An individual who begins the process of bankruptcy should take care of himself in advance, about documenting his unenviable financial condition. Therefore, in order to take into account all the details, and especially the circumstances in favor of the debtor, the main advice is not to save on the services of a lawyer.

The next stage, which is the bankruptcy of individuals - the court appoints a financial manager. All available creditors are, from this moment on, being sent an official notification of the commencement of bankruptcy proceedings in order to give them time and opportunity to advance all credit claims.

Financial (competitive) manager

Another party taking part in the bankruptcy procedure is a financial manager.

His candidacy is submitted to the court for consideration by the creditor. The main task of the manager is debt restructuring. But, in addition, the financial manager has to conduct an objective analysis and provide the creditor with information about the economic, financial and investment activities of the debtor. In general, the powers of the financial manager are not limited to this. There is another important task - to exclude the possibility of fictitious or intentional bankruptcy. Since the appointment of the manager, all transactions of the debtor are controlled. Any of them, including donations, must be approved by the financial manager.

The services of a financial (competitive) administrator should be paid by the debtor out of his own pocket. The cost of services at the moment - from 10 000 rubles per month. Plus, after the completion of the bankruptcy process, the manager receives 2% of the debt. Pay these costs - also the duty of the debtor.

How to solve the problem with loans: restructuring, settlement agreement, sale of property

The process of recognizing a citizen as a bankrupt may include the following procedures:

• Debt restructuring.
• Realization of the debtor's property for repayment (or partial repayment) of debts.
• Settlement agreement approved by the court.

The latter between the parties to the loan is entirely possible, however, not always the parties can come to it. The agreement can be concluded only after the claims of the first, and after and the second stage of the creditors are fully satisfied.

The most common solution to the debt problem is debt restructuring and (or) seizure of property from a bankrupt debtor for sale. As a rule, debt restructuring is offered first. If the debtor agrees, a restructuring plan is drawn up, where the order of the deferment is discussed, the amount of payments per month, the terms in which the debt is supposed to be repaid, and other details.

Important: during the restructuring process, the total amount of debt can be partially reduced. But completely "write off" the debt will not work.

If restructuring is inefficient for some reason, property that is the property of the debtor is seized and sold on account of the debt.

Moreover, for concealment of property (as well as for intentional bankruptcy), the debtor is provided with real criminal liability, which allows for up to six years in prison.

What property is not withdrawn from the bankrupt?

The seizure and subsequent sale of property is the inevitable consequences of the bankruptcy of an individual. However, not everything can go under the hammer. The FZ strictly determines that it is not subject to withdrawal:

• The only housing of the debtor and his family, including the land on which it is built. Exception: if in a loan, housing is listed as collateral.
• Food and fuel, necessary for heating and cooking.
• Cash in the amount necessary for the maintenance of the debtor, taking into account all dependents, which the debtor is obliged to maintain (the subsistence minimum).
• Property, intended for the implementation of labor (professional) duties.
• Pets belonging to the debtor, including cattle and livestock accommodation.
• Household items
• Prizes, awards, winnings, memorable and honorable signs.

Absence of property subject to withdrawal from the debtor

A few may complicate the bankruptcy of an individual if there is no property that can be realized in repayment of a loan. To date, the legislative solution of such a situation is too vague, there is no single solution, as the court should do in this case. One thing is clear: the absence of property does not relieve the debtor of debts. And in case of recognition of insolvency for the debtor without property, all other consequences of bankruptcy of an individual are inevitable.

In addition, the law provides for the right of the financial manager to cancel or challenge the debtor's transactions, as a result of which the property allowed for withdrawal can be returned to the bankrupt.

Negative consequences of bankruptcy

By a court decision, the status of "bankruptcy" by a citizen is acquired for five years. It is assumed that during this period a person can and should solve his financial problems. The debtor can not be re-launched into bankruptcy within these five years. An exception is when the application is submitted by a financial manager or authorized body.

The bankrupt takes many advantages: a reduction in the amount of debt, deferral of payments, the absence of charges of various penalties and penalties on existing loans. There are also negative consequences of bankruptcy of an individual:

1. Within three years after receiving the status of bankrupt it is forbidden to officially register a legal entity, register as an individual entrepreneur, participate in any way in the management of legal entities.
2. Restriction on departure outside the country until the end of the sale of seized property.
3. The duty to report your status if a citizen is going to take a loan again during the time of bankruptcy.

Bankruptcy - is it justified?

What conclusions can be drawn from all of the above? In the Federal Law, of course, there are still some shortcomings, as in any "fresh" law. Eliminate the shortcomings and adjust them with an adjustment for real conditions is possible only with time, in the course of revealing all the "roughness" in practice.

But even now lawyers call not to be afraid of the process of bankruptcy. And although it is impossible to get rid of all the debts at once from declaring oneself bankrupt, for many people the bankruptcy of individuals can become a chance to safely settle accounts with the existing debts. Reviews about the procedure of bankruptcy are ambiguous. In favor of the process of bankruptcy recognition, there is a real chance to receive installment payments on debt payments and the opportunity to reduce the amount of debt to 50%. With successful resolution of the situation, bankruptcy benefits all parties to the loan.

But it is worth considering, starting bankruptcy of individuals, reviews of finance professionals, who are not so optimistic. In view of the solid amount that will have to be paid only for the procedure and the existing gaps in the Federal Law, financiers are advised to treat bankruptcy as an extreme means of solving credit problems - when there is no other way out. It is estimated that bankruptcy is really beneficial only to those whose debts are already estimated in the millions.