Review of amendments to the Federal Law “On Insolvency (Bankruptcy)” associated with the bankruptcy of physical persons
As of October 1, 2015, the amendments to the Law “On Insolvency (Bankruptcy)” (hereinafter referred to as “Bankruptcy law”) devoted to the bankruptcy of citizens including individual entrepreneurs came into effect.
Pursuant to this regulation the cases associated with the bankruptcy of citizens are considered by the arbitration courts of the Russian Federation. If a citizen has an indebtedness of at least 500 thousand Roubles and does not have a possibility to pay for it within an established period of time and a delay of payment constitutes at least 3 months, it will cause a reason to address the court with an application seeking a bankruptcy of such citizen. The court may be addressed with an application directly from a citizen, its creditor or an authorized body.
A procedure of restructuring of debts of the citizen for a period of three years, bankruptcy and an amicable agreement can be applied when considering the case on bankruptcy.
All relevant information on the course of the bankruptcy case: acknowledgement of grounds of application on bankruptcy; launching of a bankruptcy procedure in relation to a citizen; completion of the bankruptcy procedure as well as other information shall be disclosed in internet via the United Federal Register on Bankruptcy (http://bankrot.fedresurs.ru).
Participation of the financial manager in the bankruptcy procedure shall be mandatory.
As of the date when the court issues a resolution on recognition of a citizen as bankrupt, the latter shall not be entitled to enter into any kind of transactions with the property included into the bankruptcy assets, open accounts and deposits and receive any monetary funds in connection therewith on an individual basis. Furthermore, a right of such citizen for exit from the Russian Federation may be restricted.