Bankruptcy procedure for individuals: Step-by-step instructions and stages of the process in 2021

Who can file bankruptcy for an individual

All parties to the process may submit an application to the court to declare the debtor bankrupt, in whose interests it is to confirm his insolvency.

You can submit an application:

• The debtor himself is an individual;
• Legal representative of the debtor (lawyer). But a lawyer can do this only if he has a document confirming his authority (a notarized power of attorney);
• Debtor's creditor. Creditors have the right to write an application if the duration of the delay exceeded 90 days, and the amount of the debt amounted to more than 500 thousand rubles;
• Authorized body. If all signs of bankruptcy are identified, the tax service can file instead of the debtor.

The best option would be to file a claim yourself. Otherwise, creditors or an authorized body will do this for the debtor. They have the right to choose a financial manager, which may negatively affect the bankruptcy procedure. After all, a financial manager loyal to creditors can significantly complicate the life of a bankrupt.

Free bankruptcy procedure

In 2021, out-of-court bankruptcy became available in Russia. It is carried out through the MFC at the request of the debtor. To contact the MFC, two conditions must be met:

• the amount of obligations must be in the range from 50 to 500 thousand rubles;
• the completion of enforcement proceedings in the FSSP must be confirmed due to the debtor’s lack of property (this data can be checked online on the FSSP website).

Bankruptcy through the MFC is a simplified procedure.

After submitting the application, all checks will be carried out by MFC specialists. If the above conditions are confirmed and the creditors do not raise reasonable objections, after 6 months a decision will be made to recognize the individual. persons bankrupt. The consequences of extrajudicial bankruptcy are practically no different from the judicial procedure. But you can apply again to the MFC to write off debts only after 10 years.

How to file for bankruptcy

Let’s figure out where to file an application to declare a citizen financially insolvent. Only the Arbitration Court can declare a debtor uncreditworthy. Accordingly, an application for bankruptcy of an individual must be filed with the CA. This may be an Arbitration Court located at the place of registration or at the place of residence of the debtor.

There are several ways to submit:

1. During a personal visit (the applicant submits documents to the secretariat of the Arbitration Court).
2. By submitting documents by the legal representative of the debtor.
3. Sending documents by mail (it is recommended to send them to the court by registered mail and be sure to make an inventory of the attachments).
4. By submitting an application electronically through the official service on the website my.arbitr.ru.

How to submit an application is at the choice of the debtor. An easy option, without even leaving home, is to send it via the Internet. It is important to remember that for this you will have to scan all the necessary documents, which requires time and equipment (depending on the volume of the collected package of documents).

Writing and submitting an application

The court’s decision to accept the case for proceedings depends on how correctly the application for the citizen’s insolvency is drawn up.

What to pay attention to when making an application?

The application must indicate the following:

1. The court to which the case will be sent and its address.
   The application is submitted to the arbitration court at the place of permanent registration of the citizen.
2. Personal information of the debtor
   : name, passport details, place of registration, contacts.
3. List of creditors with legal addresses
   . The necessary information can be found on the official website of the bank or microfinance organization.
4. Information on each loan product and debt balance
   . To do this, you must first obtain from each creditor a statement of the balance of the debt or order a credit history.
5. Total debt
   .
6. Reason for bankruptcy
   . This point is worth reflecting on carefully and providing really good reasons. A vacation by the sea is not a good reason, because you could do without it.
7. Information about the presence or absence of
   : property, income, dependents, criminal record, transactions completed over the last 3 years.
8. A self-regulatory organization (SRO)
   , from among which a candidate for an arbitration manager will be appointed.
9. Applications
   .
10. Date and signature.

Important!

Denis Kazarenko

arbitration manager of the MFSM company

It will not be possible to indicate the first SRO you come across; there must be a preliminary agreement with the arbitration manager (AM). Before the first court hearing, the AU must send the court consent to participate in your case. Without it, bankruptcy is impossible.

Sign up for a free consultation with an arbitration manager

In addition to the application, you must fill out Form No. 1 - a list of creditors, and Form No. 2 - an inventory of property.

Download sample documents for bankruptcy.

Be sure to notify all creditors of your impending bankruptcy before filing. You can do this by sending them letters by Russian Post with your bankruptcy application. The received receipts must be added to the attachments.

In addition, you must pay a state fee (300 rubles) and a court deposit (25,000 rubles). Payment details can be found on the website of the arbitration court to which the application is being submitted.

Important!

Anastasia Gruzdeva

Leading lawyer of the MFSC company

If the application was drawn up incorrectly or the entire list of documents was not submitted, the case will be left without progress until the violations are corrected. If they are not corrected within the specified period, bankruptcy will be denied.

When should you file for bankruptcy?

Law No. 127-FZ “On Bankruptcy” defines situations when a debtor can, and when he must, declare himself insolvent. There are situations when this is necessary.

Signs of bankruptcy:

• it is impossible to fulfill your loan obligations to the same extent;
• the value of the citizen’s property is not enough to pay off all debts by selling it.

Important!

Failure to timely file bankruptcy documents for a citizen in court is fraught with legal consequences for the debtor. There is an administrative penalty for untimely declaration of bankruptcy, imposed in the form of a fine.

The following circumstances are sufficient grounds for filing a claim:

:

• the impossibility of servicing one of the loans, or fulfilling obligations under one loan leads to infringement of the rights of other creditors;
• presence of outstanding debt;
• the fact of foreseeing bankruptcy (if the debtor has indisputable evidence of a deterioration in the financial situation in the future, due to which he will no longer be able to pay loans).

A borrower can declare bankruptcy for any amount of debt. It is important to understand how beneficial bankruptcy is. It is advisable to file for bankruptcy if the amount of debt is above 350 thousand rubles. Otherwise, the cost of the procedure will be slightly less than the written off debt.

What happens after the bankruptcy procedure?

The consequences of bankruptcy are not only release from obligations.

1. For the next five years, a citizen is required to notify about the procedure completed when applying for credits and loans.
2. You cannot enter management bodies or hold leadership positions in organizations for three years. For some types of legal entities, this ban will last even longer.
3. A bankrupt individual entrepreneur will not be able to register a business again until 5 years have passed after the completion of the case.

How to write a bankruptcy application

The sample statement of claim for declaring a citizen bankrupt fully complies with the requirements of Art. 131 Code of Civil Procedure of the Russian Federation. It is recommended to file a claim only after collecting all the documentation - then the risk of missing important facts will be minimal, and all displayed information will be documented.

You can pick up an application form from the court secretariat, or download a sample bankruptcy application below.

(44 kb.)

The procedure for filling out the document is as follows:

1. A cap.
   The name and location of the judicial authority, information about the applicant and his creditors are indicated here.
2. Main part.
   It reflects documented information. That is, information about creditors, property, marital status, and income level of the bankrupt. At this point you must indicate the reason that prompted you to file bankruptcy.
3. The pleading part.
   In it, the applicant asks to declare himself bankrupt in accordance with the provisions of Law No. 127-FZ “On Bankruptcy”. This section also indicates the SRO of arbitration managers, from among whose members the court will appoint a financial manager. It is necessary.
4. List of applications.
   It lists all previously collected documents.

First meeting

If everything was done without errors when writing and submitting the application, the court will set a date for the first court hearing (SZ). How to prepare for it?

First, prepare copies of all documents specified in the attachments in duplicate (for the court and for you).

Secondly, be prepared to answer not the most pleasant questions from the judge. Unfortunately, you never know in advance what he will ask. In this case, it is better to seek help from a professional lawyer, since he will feel confident at the meeting, know what can be said and what topics should be avoided. In addition, representatives are not bombarded with questions and the meeting can last no more than 10 minutes, which cannot be said about cases when the debtor personally represents his interests.

What risks await you at your first SZ?

1. You will be assigned the wrong AU
   . As a result, he may not defend your interests in the procedure, but take the side of the creditors. Or even delay the whole procedure.
2. Not a single AU will want to participate in the matter
   . In this case, the proceedings will be terminated. Neither the court nor the SRO are required by law to provide the AU; he must provide consent to participate in the case independently.
3. You will not be declared bankrupt
   . If your position is not convincing enough, the court will refuse to continue the insolvency procedure.
4. Introduction of debt restructuring
   . Did you plan to revise the payment schedule and continue to extend loans? Then you shouldn’t be upset, because this is exactly what restructuring means.

Find out how this stage goes with the support of lawyers.

Bankruptcy application form for an individual

Bankruptcy application (44 kb.)

Completed bankruptcy application (731 kb.)

You can find out how you can apply for bankruptcy recognition in 2021 and what will change in the bankruptcy procedure starting next year by contacting the lawyers of our company. This can be done by calling or leaving a question in an online chat.

We will write off debts through bankruptcy with a guarantee

Our lawyer will call you in a few minutes and answer all your questions

our team

• Vladislav Kvitchenko

  CEO

• Tatiana Smirnova

  Senior bankruptcy lawyer persons

• Grigory Nechaev

  Bankruptcy lawyer persons

• Oleg Martin

  Financial analyst

• Yaroslav Mitkov

  Junior bankruptcy lawyer persons

Monitoring the operation of the control unit

If you are nevertheless declared bankrupt and a procedure for the sale of property is introduced, then within one day after the meeting you must transfer your debit cards and savings books to the insolvency administrator. How can you trust your accounts if you have appointed a different agent than the one with whom you agreed? There is no way out, you will have to comply with the requirements of the Law, otherwise the debt may not be written off at all.

The arbitration manager must make all necessary publications in the EFRSB and the Kommersant newspaper. This is a very important condition, so we advise you to check this point.

Important!

Denis Kazarenko

arbitration manager of the MFSM company

It will not be possible to save money by carrying out the procedure yourself, since the debtor must compensate all the costs of the AU in the case and additionally pay for its services. When concluding an agreement with us, you receive a comprehensive package at a fixed price. Read more…

During the procedure, the AU will investigate your property status and send requests to government agencies. Based on the answers, it will be revealed what you own and whether it is subject to sale at auction.

If transactions are discovered that were completed within 3 years before the commencement of bankruptcy, the AU can appeal them. And this is not always to the benefit of the debtor.

Based on the results of all inspections and tenders, the AU draws up a report and sends it to the court. Based on this report, a decision will be made whether to write off or not write off debts. This is why it is important to have a proven financial manager, because his opinion plays an important role in the final court decision.

Video on the topic

Bankruptcy Application

Author:

Vladislav Kvitchenko

CEO . Practicing lawyer in the field of bankruptcy of individuals. persons Since 2015, she has been successfully handling insolvency cases. Vladislav is brilliantly versed in bankruptcy law, gives expert comments on legal situations and actively publishes in specialized publications.

General description of the bill

Federal Law No. 127 was adopted in October 2015. According to it, every individual who has debts totaling more than 500 thousand rubles without the ability to pay them can apply to the court to declare himself insolvent, that is, prove that he cannot pay off creditors. Then the debt is written off. As a rule, the applicant can be the debtor himself, or the plaintiff - a person or organization interested in the payment of financial resources. What rules must be followed to declare oneself bankrupt:

• Delays in payments of at least 3 months - not necessarily for all obligations at once, maybe only for one of them.
• The total amount is from 500,000 rubles, and this includes not only loans, taxes and utility bills, but also fines and penalties.

Of course, there are exceptions to the general rules. For example, if a citizen finds himself in an unforeseen situation - layoff at work, long sick leave, death of a spouse. All this entails the inability to pay debts. If this is proven in court, then the bankrupt’s status can be appropriated even before the debt increases to half a million, and a three-month delay is allowed. The trial is free, however, the plaintiff will have to pay some costs:

• State duty – 300 rubles at any bank.
• The work of a financial manager is a fixed rate of 25 thousand rubles.

The success of the process and the results achieved largely depend on this hired employee. It must be accredited and listed in Rosreestr. In general, the financial manager regulates the following matters:

• Calls creditors to a meeting.
• Conducts property assessments.
• If necessary, challenges transactions (some property agreements may be considered illegal, for example, when a future bankrupt transfers his car or housing to a relative in advance - he is clearly trying to avoid selling the property in this way).
• Controls the status of the debtor's accounts and the flow of funds to them.
• Sells things, vehicles and houses/apartments of the future bankrupt at auction.

When all formalities have been completed, the court decides which process will be carried out. There are two of them - implementation and restructuring. We'll talk about each of them further. Also at this stage a settlement agreement can be reached, however, this is a rare outcome. Peace is often concluded during preparation for court hearings.

Refinancing is the second name for restructured debts

According to statistics, such a decision is made in 15% of cases, and not every individual is interested in such an outcome, because many want to completely get rid of material burdens, and not fulfill them with a delay. The essence of restructuring is to satisfy the legal claims of creditors by the debtor, however, according to a new repayment plan. Let's give this example: a citizen has 3 loans, for each of them you need to pay 15, 10 and 5 thousand rubles per month. Every month he must repay 30,000 rubles, which is a lot. Refinancing loans will allow you to pay 10,000, but over a longer period of time. This way, all banks will receive what they are owed, and the borrower will be able to avoid going bankrupt completely. Sometimes banks themselves can make concessions without the help of the court. They may offer to reduce the interest rate, monthly payment, or provide a credit holiday. Therefore, it is very important to notify the lender about them immediately when financial problems arise, and not wait for long delays. This is more profitable in cases where there is no collateral. When car loans or mortgages, bankers prefer not to refinance the loan, but to take the car (apartment), so in these cases it is much more profitable for the borrower to persuade bank employees to restructure. In addition to the changes in conditions presented, they sometimes offer to write off fines and additional charges that have accumulated during the period of delay.

Sale of property

This is a more common practice.
After a trial, when a decision is made about the bankruptcy of an individual, all property assets are sold at open auction. Typically, even if a debtor has many outstanding bills, he still has certain valuable items, from housing to household appliances. By court decision, all this can be sold, and the money received will be used to pay off debts - not in full, but the most important, priority part. First, receipts to the state (taxes, public services) and alimony are paid, then material obligations to financial and other organizations, and only lastly to other individuals. When all possible property is sold, the remaining debt is written off. Read the essence and what bankruptcy of individuals gives

It is important to note two points here:

• Even if the debtor has no property, he can still become bankrupt.
• Not every apartment can be sold; for example, the only home cannot be sold (if it is not a mortgage), especially if minor children are registered and live here.