Consequences of declaring a citizen bankrupt
As of November 2023, the consequences of declaring a citizen bankrupt in Russia are as follows:
- within 5 years, a citizen is obliged to notify of his bankruptcy when applying for a new loan or loan, when buying goods in installments;
- for 3 years, a citizen does not have the right to hold managerial positions in organizations, which means that problems may arise if he already holds the post of head and if he has employees in subordination;
- restriction on bankruptcy in the next 5 years.
After being declared bankrupt, a citizen is released from all loan obligations, collection services and collectors stop working in his case.
2024
The Federal Tax Service told how digitalization is going in the field of bankruptcy
Digitalization allows bankruptcy proceedings to be carried out more quickly, helps reduce transaction costs, and also provides a number of other advantages. This was announced at the end of June 2024 by the Federal Tax Service of Russia (FTS).
Deputy Head of the Federal Tax Service Konstantin Chekmyshev said that arbitration managers in bankruptcy cases can use extracts from the integrated debt management and administration system (SKUAD) to improve efficiency. This platform was originally created for the internal needs of the tax authorities. According to Chekmyshev, the openness of information about the debtor, his assets and liabilities, settlements with counterparties and creditors will lead to a "decrease in disputes," since it will be clear who is the controlling person, whose claims can be subordinated and what property can be counted on.
Digitalization and automation of processes will reduce the number of paper documents. Valeria Gerasimenko, president of the Union of Arbitration Managers, National Center for Restructuring and Bankruptcy, says that its organization alone sends about 10 thousand sets of paper documents in a year regarding the appointment of managers for the procedure, not counting complaints and other statements. Olga Lvova, Associate Professor of the Department of Financial Management, Faculty of Public Administration, Moscow State University, also points out the need to digitize documents, since without this they cannot be loaded into information systems.
Chekmyshev also focused on digital debt restructuring as a mechanism that replaces bankruptcy. Largely due to this procedure, the number of bankruptcies of enterprises in 2023 decreased by 18%. At the same time, debtors who received restructuring repay 98% of the debt, and bankrupt debts write off 98%. Thus, it is more profitable to settle the debt outside of bankruptcy.[1]
The minimum debt of legal entities to start bankruptcy in Russia has been increased from 300 thousand to 2 million rubles
On May 6, 2024, the State Duma of the Russian Federation in the third (final) reading adopted a bill, according to which the minimum debt of legal entities to start bankruptcy increases from 300 thousand to 2 million rubles. For strategic enterprises and entities, the state monopoly threshold will grow from 1 million to 3 million rubles, for agricultural organizations - from 500 thousand to 3 million rubles.
The corresponding amendments to the federal bankruptcy law were prepared by the Supreme Court of Russia. The changes do not affect debtors - special entities and do not change the minimum debt limit to start bankruptcy of citizens and individual entrepreneurs: it will remain at the level of 500,000 rubles.
The innovations will help "reduce the monstrous burden on judges," who in 2023 alone considered more than 2 million disputes in bankruptcy cases, Oleg Zaytsev, chairman of the Bankruptcy Club, explained to Kommersant. In particular, the courts will be exempted from "writing acts that no one reads or appeals, and from holding meetings that no one comes to," added arbitration manager Sergei Domnin.
At the same time, as the newspaper writes, the government was initially skeptical about the initiative to raise the threshold for the amount of debt required to start bankruptcy proceedings. According to officials, the law "will violate the rights of employees of the debtor and other creditors" if the debt, which will be significant for them, is insufficient to initiate bankruptcy proceedings. At the same time, as Kommersant specified, according to the EFRSB, employees initiate bankruptcy of their employer only in 0.3% of cases. In addition, the government expressed fears that due to the growth in the volume of overdue debts, the crisis of non-payments could intensify. However, parliamentary amendments to the size of the thresholds were rejected, according to the publication.[2]
Supreme Court allowed to bankrupt foreign companies with business in Russia
In early February 2024, the judicial board for economic disputes of the Supreme Court of the Russian Federation recognized the introduction of bankruptcy proceedings by Russian courts against foreign legal entities as legal. We are talking about companies that have a "close connection" with Russia: their beneficiaries conduct business here, property is located, a significant number of transactions are made with the place of execution in the country, etc.
According to Interfax, the decision was made following the consideration of a complaint about the refusal of the courts to introduce bankruptcy proceedings against the Cypriot Westwalk Projects Ltd., which owned three shopping centers in the Moscow region. During the division of assets between Alexei and Konstantin Mauergauz, who, after the sale of the Paterson retail chain to the retailer X5 Group, began to create local shopping centers, these facilities were transferred to the authorized capital of another Cypriot company - AMN Commercial Property Advisors Ltd. This firm, together with real estate, transferred all rights and obligations under lease agreements. In particular, Westwalk pledged to transfer security payments from tenants but never did.
AMN, through the court, recovered more than 6 million rubles from Westwalk, after which it filed for bankruptcy with the Moscow Arbitration Court. The basis was the presence of a branch in Russia. However, the court of first instance, as well as the appeal and cassation, stopped the proceedings, citing the fact that the bankruptcy of the branch is not provided. The regulations state that the debtor is a foreign person who does not work in Russia, like his Russian branch. In accordance with Art. 1202 of the Civil Code of the Russian Federation, the liquidation of a legal entity, including compulsory, must follow the laws of the country where such a person was registered. However, the Supreme Court panel considered otherwise.
 | The current national legislation does not exclude the initiation by a Russian court of an insolvency (bankruptcy) procedure complicated by a foreign element both on the side of the creditor (in particular, the applicant in the bankruptcy case) and on the side of the debtor, the decision of the Supreme Court says. |  |
At the same time, it is emphasized that the key to resolving such disputes is the presence or absence of a close connection between the debtor and Russia. In case of initiation of bankruptcy, the procedure can cover both all assets of the debtor, regardless of their country of location, and be local - apply only to property in Russia.[3]
2023
The number of bankruptcies in Russia for the year decreased by 18% due to state support measures
In 2023, the number of bankruptcies in Russia decreased by 18% thanks to measures of state support for the economy, which contrasts with the global trend of an increase in the number of bankrupt businesses. This was stated on June 8, 2024 by the deputy head of the Federal Tax Service (FTS) Konstantin Chekmyshev.
The main reasons for the positive dynamics were debt restructuring measures and the introduction of the Unified Tax Account. According to the Federal Tax Service, the coefficient showing the ratio of the amount of tax debt to the total amount of receipts as of May 1, 2024 amounted to 5.6%, which is lower than the figure for the end of 2020 (6.6%). This is equivalent to 497 billion rubles of budget revenues.
In
The single tax bill, introduced in 2023, played a key role in reducing the share of erroneous payments and ensuring the transparency of the tax payment process. As a result, the number of companies with tax arrears decreased by 2.5 times, and the number of collection measures decreased by 2.3 times.
According to Chekmyshev, the Federal Tax Service is actively using automated systems to assess the financial status of debtors. The scoring system, which includes 40 factors, helps to determine the best option for debt settlement, including deferrals, installments and settlement agreements. As of April 1, 2024, through a special service of the Federal Tax Service - the Debt Restructuring Platform - 962 billion rubles of debts were restructured, of which more than 250 billion rubles are long-term measures.
He added that support from the state made it possible to maintain the efficiency of enterprises that employ 1.2 million people. In 2023, 3,572 companies received support, which reduced the number of new bankruptcies to 7,400.
Companies that receive support, in 98% of cases, fulfill the agreed debt repayment schedule. In bankruptcy litigation, debt recovery is only 2%. The Federal Tax Service also offers assistance through the Debt Restructuring Assistance Fund, which supports business in the amount of 12.8 billion rubles.[4]
The total debt of bankrupt in Russia doubled to 4.52 trillion rubles
At the end of 2023, the total debt of Russian legal entities and individuals, including individual entrepreneurs, within the framework of bankruptcy procedures reached 4.52 trillion rubles, which is a new anti-record. This is 2.15 times more compared to the previous year, when the total debt of bankrupt in the Russian Federation amounted to 2.1 trillion rubles. The previous maximum figure was recorded in 2018 - 4.11 trillion rubles. The corresponding figures were published on April 17, 2024 by the Judicial Department at the Supreme Court of the Russian Federation.
The report says that the total debt of bankrupt in Russia is growing primarily due to the corporate segment. By the end of 2023, the debt of legal entities that declared themselves insolvent was estimated at 3.98 trillion rubles. For comparison: a year earlier, the figure was 1.67 trillion rubles. Thus, the growth was at around 138%. At the same time, the number of companies for which the bankruptcy case was completed decreased on an annualized basis from 7052 to 6270. In general, in 2023, the courts declared about 7.3 thousand organizations bankrupt.
In the civil sector, the total debt in bankruptcy cases in 2023 amounted to 437.13 billion rubles against 384.72 billion rubles in 2022. Year-on-year growth is about 14%. The courts declared bankrupt approximately 346.5 thousand people (excluding individual entrepreneurs) against about 274 thousand in 2022.
The report also notes that in the overwhelming majority of cases (66%), the reason for initiating a personal bankruptcy of a citizen is a debt in the amount of 500 thousand rubles to 3 million rubles. In a quarter of insolvency applications, it is said about debt up to 500 thousand rubles. And 81 people in 2023 announced a debt of over 1 billion rubles.[5]
The increase in the number of bankruptcies of individuals by 20% to 350.8 thousand.
In 2023, the number of court decisions on declaring Russians bankrupt and introducing a procedure for the sale of their property reached 350.8 thousand. This is approximately 20.7% more compared to 2022, when the number of such decisions was 278.1 thousand. The corresponding data were released in mid-March 2024.
According to the Kommersant newspaper, referring to the information provided by Vyacheslav Kosakov, managing partner of NOVATOR Legal Group, the bankruptcy of individuals in the Russian Federation is mainly used by the citizens themselves, who "in principle have not so many assets." The procedure is used as a tool for debt relief to credit institutions. Moreover, about 68% of such cases end with the fact that creditors do not receive anything at all.
Large debts from individuals are usually collected as part of the bankruptcy of legal entities. In particular, in 2023, 5.2 thousand applications were submitted for bringing managers or beneficiaries to subsidiary liability for a total of 406.3 billion rubles. The list of the most frequently contested transactions in the framework of bankruptcy of individuals includes gift agreements, non-market sales contracts, marriage agreements and property sharing agreements, money transfers, as well as settlement agreements. It is also noted that the bankruptcy procedure of an individual lasts an average of 1 year and 3 months.
On November 3, 2023, amendments to the law on bankruptcy of individuals entered into force. The procedure has become more accessible to vulnerable categories of the population, including pensioners and women on maternity leave. At the same time, the minimum amount of debt with which you can apply for bankruptcy has been reduced from 50 thousand to 25 thousand rubles, and the maximum amount of such debt has been increased from 500 thousand to 1 million rubles.[6]
The volume of sales of bankrupt property in Russia increased by 19% to 72.2 thousand transactions
In 2023, 72.2 thousand transactions for the sale of bankrupt property were completed, which is 19% more than a year earlier. Sberbank published such data in mid-February 2024.
According to the credit institution, the sale of bankrupt property in monetary terms in 2023 reached 209.1 billion rubles. Most often, vehicles (24 thousand lots), buildings (14 thousand), land plots (12 thousand), receivables (9 thousand) and equipment (7 thousand) were sold.
In
| | We see a noticeable increase in the number of transactions in Russian bankruptcy proceedings in 2023. The average check on the realized pledges of Sberbank during the year doubled, reaching 23.5 million rubles. We expect that this trend will continue in 2024, "Kirill Demin, Vice President, Director of the Troubled Assets Department of Sberbank, told Kommersant. | |
The total number of completed bankruptcy procedures in 2023 amounted to 282 thousand, which is 40% more than in 2022. This increase is explained by an increase in the number of insolvent citizens from 278 thousand in 2022 to 350 thousand in 2023 in accordance with (Fedresurs data).
At the same time, the number of cases in which creditors are left without receiving funds from citizen debtors as part of bankruptcy increased from 65.3% in 2019 to 69.2% in 2023. However, due to the growth in the number of bankrupt citizens, creditors still received more money in 2023 than in 2022 - 47.8 billion rubles against 32.7 billion rubles, respectively.
The situation in the field of bankruptcy of legal entities has improved, as the share of creditors who received nothing from corporate bankruptts decreased from 62% in 2019 to 54.7% in 2023. In total, in 2023, creditors received 297.1 billion rubles, while in 2022 the amount amounted to 243.6 billion rubles. Most of these funds were obtained from the sale of bankrupt property at auctions.[7]
Courts for the year declared bankrupt a record 350.8 thousand Russians
In 2023, Russian courts declared 350.8 thousand citizens and individual entrepreneurs bankrupt, which is a record value since the introduction of the corresponding procedure in 2015. For comparison, in 2022 the figure was approximately 278.1 thousand, in 2021 - 192.8 thousand. Such indicators are given in the report published by Fedresurs on February 9, 2024.
At the same time, there is a decrease in the growth rate of the number of individuals declared bankrupt by the court. If in 2021 their number increased by 62% compared to the previous year, then in 2022 - by 44.2%, and in 2023 - by 26.2%. In total, from October 2015, when the procedure was introduced, until the end of 2023, approximately 1.1 million citizens of the Russian Federation were declared insolvent.
According to the published data, in 2023, in 96.6% of cases, citizens themselves initiated a judicial procedure for personal bankruptcy. A year earlier, this figure was slightly higher - 96.7%. The share of competitive creditors as applicants on an annualized basis increased from 2.2% to 3.1%, and the share of the Federal Tax Service decreased from 1% to 0.4%.
On average, in 2023, creditors of citizens managed to get only 6% of the amount of debt from bankrupt, and in 69.2% of cases they did not receive anything. The share of cases in which the debtor did not have property amounted to 91.7% against 90.2% in 2022. The average duration of judicial procedures for the sale of a citizen's property in 2023 remained at the level of the previous year - 271 days. At the same time, an average of 199 days was required to restructure the debts of an individual.
It is also noted that in 2023 the number of corporate bankruptcies in Russia decreased by 18.2% compared to 2022 - to 7.4 thousand. The largest number of bankruptcies was recorded in construction (1822), trade (1812) and real estate transactions (734).[8]
Since 2015, 1 million Russians have been declared bankrupt
The number of Russians declared bankrupt in January-September 2023 amounted to 249.9 thousand, an increase of 28.8% compared to the same period in 2022 against an increase of 41.2% a year earlier. Over the period of the existence of the consumer bankruptcy procedure, from October 2015 to September 2023, 1.003 million people have already become insolvent. This is evidenced by the data of Fedresurs.
In the overwhelming majority of cases, citizens themselves initiate their bankruptcy - 96.6% of cases, creditors do it in 3.1% of cases, the remaining 0.4% of applications fall on the Federal Tax Service. Among the Russian regions, the number of bankrupt is leading:
- Moscow region (12,626 bankruptcies, + 34.2%),
- Moscow (12,160, + 30.8%),
- Krasnodar Territory (11,843, + 24.6%),
- Sverdlovsk region (9497, + 20.1%),
- Bashkortostan (8630, + 11.9%).
According to the head of Fedresurs Alexei Yukhni, the increase in the number of people wishing to resort to the bankruptcy procedure will continue. He noted that this is facilitated by the adopted laws protecting the rights of debtors. Mikhail Alekseev, an expert on the project "For the Rights of Borrowers" of the Popular Front, believes that in the coming year - two applications for judicial bankruptcy will increase by about 30%. This is indicated by an increase in the level of debt in the country as a whole and the number of borrowers with a debt burden of over 80%, he said in a conversation with RBC in early October 2023.
In addition, Fedresurs counted the number of new corporate bankruptcies. Their number decreased by 29.8% or to 5071. But the publication notes that there has been an increase in the introduction of the observation procedure by 28% (5555). In 2019, courts less often introduced bankruptcy proceedings (by 44.4%) and observations (by 25.2%). At the same time, information about the intention to go to court with bankruptcy applications began to be published more often on the portal. For 9 months of 2023, there were 2.9 times more such publications (23,519[9]
2022
The number of bankruptcies of individuals and individual entrepreneurs in Russia increased by 44.2%
In 2022, the number of court bankruptcies in Russia increased one and a half times (+ 44.2%) compared to the previous year - 278.1 thousand citizens of individuals and individual entrepreneurs (individual entrepreneurs) underwent the procedure. This is evidenced by the data of the Fedresurs project published in January 2023.
The number of extrajudicial bankruptcies increased by 52.6%, to 7.1 thousand people. Citizens, as a rule, initiate their own bankruptcy. Debtors in 2022 made applicants in 96.7% of procedures (94.9% in 2021). Creditors initiated 2.2% (was 3.9%), the Federal Tax Service - 1% (was 1.1%). Cases of extrajudicial bankruptcy among clients are rather isolated, Yulia Grakhova, director of the legal department of Novikombank, told Izvestia.
In 2022, in the Krasnodar Territory, the number of court bankruptcies amounted to 13.95 thousand. According to this indicator, the region ranks first in Russia, Izvestia reports, citing data from Fedresurs.
By a small margin, the second and third places in the number of bankrupt residents in 2022 were taken by the Moscow region and Moscow - 13.47 thousand and 13.43 thousand, respectively. The fourth and fifth lines were taken by Bashkortostan (11 thousand) and the Sverdlovsk region (10.9 thousand).
In 2022, the moratorium on bankruptcy played a role and protected business and citizens in conditions of turbulence in the economy, the first deputy head of the Ministry of Economic Development Ilya Torosov told the newspaper. The moratorium envisaged a ban on the initiation of bankruptcy proceedings and was in effect from April to September 2022.
According to Ilya Torosov, in 2022, as during the active COVID-19 coronavirus pandemic, a surge in defaults was predicted, but this did not happen. Also, when analyzing the factors affecting the number of insolvent citizens, it is impossible not to take into account that, as a rule, they themselves initiate their bankruptcy, the official added.[10]
The total number of bankruptcies of individuals reached 669 thousand
For the three quarters of 2022, 192.1 thousand people were declared bankrupt, which is 41.2% more than in the same period last year (last year the increase by 2020 exceeded 78%). In total, 669.3 thousand Russians have become bankrupt since October 2015.
Most often, as before, citizens bankrupt themselves (96.1% of cases), in 2.7% of cases their creditors do it and in 1.2% - the tax authorities.
Russians in two years wrote off debts of 3.7 billion rubles
The mechanism for getting rid of debts without trial in two years from the moment of its launch - September 1, 2020 - was used by 10.6 thousand people, while there were 22.5 thousand applicants. On September 12, 2022, the first deputy head of the Ministry of Economic Development Ilya Torosov told Izvestia about this.
According to Fedresurs, for the period from September 1, 2020 to August 30, 2022, citizens sent 22.5 thousand applications for extrajudicial bankruptcy to the MPSC, of which 11.9 thousand were refused.
According to Torosov, by the beginning of September 2022, citizens in total were written off about 3.7 billion rubles. He also said that the reasons for the refusal of the extrajudicial bankruptcy procedure are mainly due to the fact that citizens' petitions do not meet the established criteria. For example, the applicant will be denied assistance if he does not provide an appropriate document on the end of enforcement proceedings, which would prove that the citizen does not have property that can pay off the debt.
By September 2022, as Torosov said, there was a decrease in the number of refusals to initiate cases, which indicates an increase in awareness of citizens about the possibilities of a new bankruptcy practice. In the first month of the mechanism, the number of failures reached 80%, in August 2022 this figure went below 40%. The share of approvals rose from 20% to 61%. In terms of the number of bankruptcies without trial, the leaders are, Omsk,, Chelyabinsk Orenburg Sverdlovsk regions and the region Krasnodar.
Experts interviewed by the newspaper warn that in an unstable economic situation, the financial situation of Russians may deteriorate. In previous years, citizens have gained loans, and by September 2022, the complication of economic processes, the gap in supply chains, the departure of Western companies from the market increase the risks of bankruptcy of small and medium-sized businesses and an increase in unemployment, says Nikolai Pereslavsky, an employee of the Department of Economic and Financial Research of the CMS Institute.[11]
The number of bankruptcies of individuals for the entire time reached 597 thousand
For the entire time of the bankruptcy of individuals, by July 2022, 597 thousand Russians were declared insolvent. The number of bankrupt Russians since the beginning of the year has grown by 40% - to 121.3 thousand. In 2022, Moscow and the region became the record holders for the number of bankrupt - 5.7 thousand and 6.1 thousand people.
The Government of the Russian Federation introduces a moratorium on bankruptcy at the request of creditors
In early March 2022, it became known that the Government of the Russian Federation was introducing a moratorium on bankruptcies at the request of creditors. The measure is aimed at supporting business, said First Deputy Prime Minister of Russia Andrei Belousov, whose words are quoted on the website of the Cabinet.
This message does not specify who the moratorium will apply to and for how long it will be valid. However, a federal official told Forbes that the moratorium will be tentatively extended to both legal entities and individuals, it will be valid until the end of 2022.
The government was given the right to introduce a moratorium on bankruptcy at the request of creditors in the spring of 2020 as one of the measures to overcome the economic consequences of the COVID-19 pandemic. According to the law, such a measure can be introduced "in exceptional cases," in particular, "with a significant change in the ruble exchange rate."
The Federal Tax Service (FTS) announced a temporary suspension from March 9, 2022 of the initiation of bankruptcy of debtors. The decision was made to reduce the threats of bankruptcy in connection with the anti-Russian sanctions of a number of countries. At the same time, the department does not indicate for how long appeals to the courts will not be sent to initiate bankruptcy proceedings. The department stressed that the priority in the work of the tax authorities will be to promote debt restructuring. We are talking about installments and amicable agreements.
According to Elizaveta Fetisova, a lawyer at the Schwartz & Partners law firm, the moratorium not only does not limit the debtor's right to independently declare bankruptcy, but also allows him not to do so. The moratorium automatically releases the general director and shareholders of the debtor from the obligation to go to court with a bankruptcy petition when the company's proximity to insolvency is obvious, she explained to Vedomosti[12]
2021
The number of bankruptcy of legal entities increased, but remained below the dock level
In 2021, 10,319 legal entities in Russia were declared bankrupt, which is 3.9% more than a year earlier, but less than in 2019 (12,401), when there was no COVID-19 coronavirus pandemic. These data were published on January 14, 2022 by the Unified Federal Register of Legally Significant Information on the Facts of the Activities of Fedresurs Legal Entities.
According to the head of Fedresurs Alexei Yukhnin, the increase in the number of corporate bankruptcies in 2021 only partially compensated for their decline in 2020, when, due to the pandemic, the courts did not work at all for some time.
| | In general, expectations of a surge in the intensity of ruin were not justified, moreover, it remains below the dock level. This is due to the fact that the state provided support to those affected by the pandemic. In addition, the increasingly active attraction of owners to subsidiary liability scares away voluntary bankrupts, - he noted | |
Most of the bankruptcy procedures in 2021 were initiated by bankruptcy creditors - 72.4% (in 2020 - in 77.1% of cases). The Federal Tax Service acted as an applicant in 18.8% of cases, while a year earlier - in 13%, debtors - in 8.2% of cases (it was 9.3%), employees - in 0.6% of cases (it was 0.5%).
Still, the largest number of bankruptts falls on four areas: trade (2585 bankrupt in 2021), construction (2317), real estate operations (1199) and manufacturing (1154). The largest increase in the number of insolvent persons last year fell on the sphere formations (12 bankrupt, plus 50%), culture and (sport 14, plus 40%) and hotels and catering (176, plus 27.5%).
Among the regions in 2021, Moscow was the leader in the number of bankrupt companies (2,129 pcs., + 5.9% by 2020), St. Petersburg (801; + 9.9%), Moscow Region (793; + 12.3%), Sverdlovsk Region (344; + 1.4%) and Krasnodar Territory (316; +[13]
192,846 citizens declared bankrupt
In Russia, 475,000 people have been declared bankrupt in six years. Almost half of the bankrupt appeared in 2021 - 192,846 citizens became them. This is a record figure, 62% more than in 2020.
The Supreme Court of the Russian Federation exempted top managers of bankrupt banks from liability
In October 2021, the Supreme Court of the Russian Federation issued a decision limiting the possibility of bringing bankers to subsidiary liability for the debts of their credit institution. The precedent was the bankruptcy case of Baltika Bank. The Deposit Insurance Agency (DIA) demanded that five top managers of this credit institution be brought to subsidiary liability for 11 billion rubles, linking their claims with unprofitable transactions and the formation of bad debts. Read more here.
Russians will write off debts of 1.6 billion rubles for extrajudicial bankruptcy
The debts of Russians for more than 1.6 billion rubles will be written off as part of the mechanism of extrajudicial bankruptcy. This became known on September 20, 2021.
The results obtained indicate that the institution of bankruptcy in Russia took place, said Deputy Minister of Economic Development Ilya Torosov.
According to him, in the first year of the implementation of the simplified bankruptcy procedure, 12 thousand applications were received, of which 5 thousand were initiated by the procedure of extrajudicial bankruptcy. It is fully completed in relation to 2.5 thousand citizens - these are those who applied among the first.
As for the rest, the six-month period has not yet passed, after which the applicant will be recognized as exempt from obligations according to the list of debts presented to him, the deputy minister said. In total, more than 1.6 billion rubles of citizens' debts will be written off.
As of September 2021, experts are working to improve the procedure for extrajudicial bankruptcy. Russians may have the opportunity to submit an application online through the State Public services portal, the Ministry of Economic Development has developed a corresponding bill. Also, as part of out-of-court bankruptcy, it was proposed to adjust the amount of debt to 1 million rubles.
According to the head of the Fedresurs project Alexei Yukhnin, the number of applications for an extrajudicial procedure of 12 thousand is comparable to the number of bankruptcies in the first year of the judicial mechanism - about 14 thousand. The spread of a simplified bankruptcy scheme restrains the upper debt threshold of 500 thousand rubles and the need to complete enforcement proceedings due to the lack of property that can be recovered, Yukhnin noted. The proposed increase in the amount of debt by the Ministry of Economic Development will lead to an increase in demand for a free extrajudicial procedure, he said.
As of September 2021, debtor citizens with a small income cannot take advantage of the opportunity to declare themselves bankrupt without trial, said Eduard Olevinsky, head of the legal bureau of Olevinsky, Buyukyan and Partners. While there is a constant, albeit meager, earnings or, for example, a pension, enforcement proceedings cannot be completed, the expert explained.
The credit institutions noted that they have not yet recorded a large number of extrajudicial bankruptcies among their clients. In Sberbank, about 700 clients undergo this procedure, in Rosbank, out of 7.3 thousand existing insolvency cases, more than 100 belong to the introduced mechanism. In Otkritie, 79 clients took advantage of the simplified scheme[14].
The first in Russia seizure of a single housing from a citizen for debts
In early July 2021, it became known about the first seizure of the only housing for debts in Russia. In Yekaterinburg, at the auction, they sold a two-level five-room apartment declared bankrupt Arkady Potorochin, who owed 21.4 million rubles. Read more here.
Growth of bankruptcies of citizens and individual entrepreneurs by 2 times to 88 thousand
The number of Russian citizens, including individual entrepreneurs, declared bankrupt in the first half of 2021, exceeded 88 thousand, which is 2.1 times more than in the same period of 2020. In January - June 2020, the growth of the indicator was 1.5 times in relation to the same period in 2019.
2020
Introduction of a moratorium on the initiation of bankruptcy proceedings
To protect companies affected by the COVID-19 pandemic crisis, the Russian authorities have imposed a moratorium on the initiation of bankruptcy proceedings. All public companies are automatically subject to a moratorium, but can be removed from the "protected" list upon their own request.
At the end of June 2020, 517 thousand enterprises and 1.62 million private entrepreneurs were on the "protected" list.
Decrease in the number of bankruptcies of individuals due to the shutdown of courts
Since 2015, Russian legislation has provided for the possibility of bankruptcy of individuals. The number of such bankruptcies is steadily growing from year to year. The decrease in their frequency in 2020 can be explained by a decrease in the number of IP bankruptcies due to the announced moratorium and the suspension of court activities for two months due to the COVID-19 epidemic.
Increase in the number of bankruptcies of individuals and individual entrepreneurs for 1 quarter by 70%
In January - March 2020, 22.4 thousand Russians became bankrupt, which is 70% more than in the same period last year. The growth is due to the fact that bankruptcy proceedings have become easier.
How the personal bankruptcy procedure works
The personal bankruptcy procedure for March 2020 is regulated by the Law "On (Insolvency) Bankruptcy" and consists in the consideration of the case by the Arbitration Court, which is initiated at the request of the bankruptcy creditor, the Federal Tax Service or the debtor himself[15].
The court considers the validity of the submitted application and introduces one of two procedures in relation to the citizen. Debt restructuring (if a citizen's solvency can be restored in the near future), within the framework of which debts are settled with his creditors in accordance with the plan. If the financial situation of the debtor does not allow restoring its solvency or there is no restructuring plan, the court introduces a procedure for the sale of property. At the expense of the money received in this way, the claims of creditors are satisfied.
During the bankruptcy case, the financial manager conducts an analysis to establish whether the actions of the citizen were taken specifically to cause damage to creditors. It also determines what restrictions will be imposed on property and transactions with it and how funds in accounts and deposits will be used.
The time it will take to go through the bankruptcy procedure depends on many factors: the size, amount and types of debts, the presence or absence of property, its value, as well as the speed of work of the financial manager, the presence or absence of circumstances that give reason to consider the actions of a citizen malicious, and much more. On average, bankruptcy proceedings take more than nine months, but it should be borne in mind that several more months will pass from the moment of filing a bankruptcy petition with the court until a decision is made to start the procedure.
As the number of bankruptcy cases is constantly growing, the burden on the courts considering such cases is also increasing: in 2019, compared to 2018, the number of bankruptcy cases increased by 56.8%.
Based on the results of the consideration of the case, the court decides on the release from debts or on the refusal of this. The verdict depends on the readiness of the citizen to cooperate with the financial manager, the court, the lack of malice. In addition, the law establishes that under some circumstances, an exemption from debt obligations cannot be obtained.
Bankruptcy remains unavailable
Bankruptcy is a rather complicated procedure. The law that regulates it contains many material and procedural and procedural points, which can vary depending on the circumstances of the case.
It is necessary to have knowledge and experience in participating in such cases. Therefore, there are not so many competent specialists in the field, and their services are quite expensive. And although it seems that the cost of bankruptcy is relatively small - 300 rubles of duty for initiating a case and 25 thousand rubles in the form of a fixed amount of remuneration to the financial manager - in the end the amount may be much more. This happens at the expense of the manager for the necessary events, the services of lawyers and much more.
It is difficult to name the exact cost of the bankruptcy procedure, because it depends on the circumstances of a specific case and on the specifics of the region: for example, in Moscow it is more expensive to declare bankruptcy than in other constituent entities of the Russian Federation. Prices can range from 80-150 thousand for relatively simple things to several hundred thousand for more complex things.
What prevents you from becoming bankrupt
Perhaps the main problem is that after the completion of the bankruptcy case and the sale of property, a citizen can still remain proper to his creditors: he may be refused to write off debts, and "professional collectors" will work with debts, as before. This can make life difficult for the bankrupt and his loved ones.
The practice of applying bankruptcy law is still small, so so far the criteria for a citizen's integrity and the conditions when he cannot be exempted from debts are not clear enough. The legislation determines the basic conditions, while others are left to the discretion of the court.
Difficulties may also arise when dividing the jointly acquired property of spouses, one of which is undergoing bankruptcy proceedings. The ability to collect a single home, if it is bought on a mortgage, can leave the debtor's family on the street. A lot of problems arise even after the termination of bankruptcy cases of citizens who do not have property. Bills that involve simplifying the procedure have not yet been passed.
How to fix the situation?
In general, many experts believe that the current mechanism is not effective enough. Statistics show that in 2019, 90.7% of bankruptcy cases were initiated at the request of citizens. This figure increased by more than 4% compared to 2018. But in 71% of cases, citizens do not have property that could be sold in favor of creditors, and the reason is not always related to the deliberate actions of debtors. Therefore, in most cases, a long and complex procedure with the involvement of financial managers and representation of interests in court is not needed. It is only necessary to establish the integrity of a citizen and identify the lack of property. This could be done with the help of a simple preliminary check and property status.
Bill on extrajudicial procedure for declaring a citizen bankrupt
The State Duma adopted in February 2020 in the first reading a bill on extrajudicial procedure for declaring a citizen bankrupt. For people who find themselves in a difficult situation, innovations will be a deliverance not only from unsustainable debt, but also from delays and overpayments.
According to the logic of the legislator, out-of-court order will be provided to citizens for whom there is a debt of 50,000 rubles to 500,000 thousand. Now a citizen can declare himself bankrupt only if his debt is more than 500 thousand rubles and the delay in payments is more than 3 months. The State Duma allows bankruptcy without trial.
Lawyer Musa Abdurakhmanov from the law office of Moscow "" Scheglov & Partners noted: "It will be possible to exercise this right from March 1, 2021 by submitting an application to self-regulatory organizations of arbitration managers. The manager will check the compliance of all grounds for extrajudicial bankruptcy. For example, the income of such a citizen should be below the subsistence level for each member of his family, and the amount on his account should not exceed 50,000 rubles. After the arbitration manager places information on the initiation of an extrajudicial bankruptcy procedure in a single register, interest, fines and penalties will cease to be charged to the citizen within a year, and the enforcement documents will be suspended. For this "bankrupt" year, it is assumed that the arbitration manager will help the debtor get out of debt obligations and will not leave him without funds to exist. One of the main differences between extrajudicial bankruptcy and its judicial counterpart is that all the costs of conducting the case and the arbitration manager will be paid from the fund to support extrajudicial bankruptcy of citizens. This procedure will provide an opportunity for citizens to increase their solvency, which, of course, will be beneficial to creditors, and will also help avoid complex and long, and most importantly costly, litigation for the debtor. "
Thus, the new law will allow poor citizens to relieve the debt burden. It will also reduce the burden on the courts, increase the availability and effectiveness of bankruptcy proceedings for individuals. Currently, the bankruptcy procedure costs about 100 thousand rubles, which is too expensive for those wishing to go bankrupt.
The new procedure greatly simplifies the entire bankruptcy procedure. So, those who want to go bankrupt will only need to apply for bankruptcy out of court. The arbitration manager will check whether the citizen meets the requirements: a person must be officially recognized as unemployed or have an income source below the subsistence level for each family member. He should not have property, with the exception of the one that cannot be recovered, and the money in the accounts should not be more than 50 thousand rubles. After verification, the manager will post information on the initiation of an extrajudicial bankruptcy procedure in the unified federal register, and his fee for work and all expenses in the case will be fully paid from the fund to support extrajudicial bankruptcy of citizens.
After the process is launched, the accrual of fines, penalties and other financial sanctions, as well as interest on all obligations, ceases for a citizen for a year. This is especially true for debtors to microfinance organizations. In addition, the action of executive documents on property recovery from a citizen is paused. At the same time, a person will not be exempted from paying alimony, payments for claims for compensation for harm caused to life or health, etc.
It is important that bankruptcy will not become an indulgence - a simplified procedure can only be passed once. In addition, at any time, any creditor can challenge and transfer this simplified procedure to a traditional judicial procedure. Therefore, the new scheme will not lead to abuse by fraudsters.
2019: Growth of bankruptcies of citizens by 56% to 68.9 thousand
According to Fedresurs, at the end of 2019, a more than one and a half-fold increase in the number of bankruptcies of individuals (including individual entrepreneurs) was recorded. The number of bankrupt citizens increased to 68.98 thousand - this is 56.8% more than in 2018.
2018: 30,700 bankruptcies (+ 2%)
Russia The number of bankruptcies increased by 2% in 2018 compared to 2017 and amounted to about 30,700. We can conclude that the growth rate of bankruptcies is low. According to the forecast of economists, the Coface number of corporate bankruptcies in Russia at the end of 2019 will grow by 2%. If we talk about the dynamics in specific sectors of the Russian economy, then a sharp increase in the number of bankruptcies was observed in the sector of production of electrical goods, while record low bankruptcy rates were noted in the food industry, retail and. to trade agriculture
2017:660 thousand Russians - potential bankrupt
At the end of the first half of 2017, 660 thousand Russians are potential bankruptcies, which is about 1.4% of the total number of borrowers with open accounts. According to the United Credit Bureau (OKB), over 2 years, the share of potential bankrupts in the total number of borrowers with open accounts decreased from 1.5% to 1.4%, although their number increased from 580 to 660 thousand people.
Potential bankruptcies included citizens with a debt of more than 500 thousand rubles. at least one loan, payments on which were not made for 90 or more days.
Also, about 7.1 million more Russian borrowers who currently do not pay on their loans for more than 90 days can potentially use this right to ease their financial situation.
At the same time, most of the potential bankrupt - borrowers with two open loans - are 21% of the total number of potential bankrupt, in second place are borrowers with three open loans - 19%, in third - borrowers with one open loan, there are just under 16%.
If we estimate the share of potential bankrupt in each group separately, then it can be seen that the more open loans a borrower has, the higher the likelihood that he may become bankrupt.
So among borrowers with one open loan, the share of potential bankrupt is 0.4%. At the same time, if on average the owner of one loan owes the bank about 93 thousand rubles, then the potential bankrupt is 1.4 million rubles. At the same time, among borrowers with 10 or more open loans, every third is potential bankrupt, and the average debt on its loans is almost 3.9 million rubles. In 76% of cases, borrowers stop paying on cash loans on time with an average debt balance of about 754 thousand rubles. In second place are car loans. In 10.2% of cases, the owners of such loans with an average debt of 981 thousand rubles. go into the category of potential bankrupt. 5.8% are mortgages with an average debt of 3.1 million rubles. Credit cards account for 5.0% of bankruptcies, the average debt in this case is 697 thousand rubles. Collateral loans with a debt of more than 1.6 million rubles. accounts for 2.3% of cases of potential bankruptcies. The least bankruptcies are accounted for by POS loans - no more than 0.2%. The average debt on these loans is 567 thousand rubles.
2016: In Russia, 1.4% of borrowers are bankrupt
According to the United Credit Bureau (OKB), at the beginning of 2016, about 593 thousand Russians fall under the bankruptcy law, which is about 1.4% of the total number of borrowers with open accounts. These are citizens, with a debt amount of more than 500 thousand rubles. for one or more loans, payments on which were not made for 90 or more days.
2015: Entry into force of amendments to the bankruptcy law
On October 1, 2015, amendments to the law on insolvency (bankruptcy) came into force. The law obliges citizens whose total debt is more than five hundred thousand rubles to apply to the court to declare him bankrupt if he cannot fulfill his payment obligations to one or more creditors. Also, after the entry into force of the law, citizens experiencing difficulties in repaying their loans can voluntarily begin bankruptcy proceedings, regardless of the amount of their debt.
See also
Notes
- ↑ FTS at PMYF supported digitalization of bankruptcy
- ↑ Entry into bankruptcy was complicated
- ↑ The Supreme Court considered that the courts of Russia have the right to bankrupt foreign companies with business in the Russian Federation
- ↑ The Federal Tax Service announced a decrease in the number of bankruptcies by a third through the development of state support
- ↑ The total debt of bankrupt in the Russian Federation in 2023 doubled, updating the anti-record
- ↑ The number of bankruptcies of individuals in 2023 increased by 20%
- ↑ The number of transactions for the sale of bankrupt property increased by 19%
- ↑ Bankruptcy in Russia: statistical indicators for 2023
- ↑ ). Since 2015, a million Russians have been declared bankrupt
- ↑ Achieved recognition: in 2022, 278 thousand citizens became bankrupt
- ↑ Russians promised to write off 3.7 billion rubles of debts without trial
- ↑ Belousov announced a moratorium on bankruptcy at the request of creditors
- ↑ 8.2%). The number of corporate bankruptcies in the Russian Federation for the year increased by 3.9%, but remains below the dock level
- ↑ Russians will write off debts worth 1.6 billion rubles
- ↑ Why the personal bankruptcy procedure does not work
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