In the legislation of the Russian Federation there is such a legal category as bankruptcy. The relevant provisions in regulatory acts may apply to both individuals and legal entities. What is the specificity of the bankruptcy procedure for both types of subjects of legal relations?
What is bankruptcy
The concept of "bankruptcy" can be interpreted in two ways.
Firstly, this term can be understood as a condition in which the debtor, based on objective criteria, is not able to settle accounts with creditors. The subject of debt is most often a bank loan. But it can also be a loan issued, for example, by a microfinance organization that does not have a banking license, or by a private person. The subject of collection may also be obligations of a citizen or organization arising in connection with mandatory payments to the state treasury (for example, taxes, alimony and other fees).
Secondly, the concept of bankruptcy may be associated with the procedure in which the insolvency of the borrower is proved legally. At the same time, it is possible that upon its passage the financial condition of the debtor will even be somewhat relieved. This may be due, for example, to the fact that the creditor agrees to write off part of the debt. Providing for the absence of claims against the borrower or softening the terms of payments, a settlement agreement at the bankruptcy stage can also be concluded.
The Russian legislator provides an opportunity for legal entities, and more recently, for citizens to take advantage of the relevant procedure. Difficult borrowers, initiating a bankruptcy process, can rely on restructuring, or even write off debt in the manner prescribed by legal acts. At the same time, the individual or organization does not receive the status of bankrupt not at the moment when they show the corresponding initiative, but at the final stage of the communication process with the creditor. The first stages of the bankruptcy procedure do not at all imply that the borrower will necessarily be declared insolvent.
Bankruptcy Law
But what are the signs of bankruptcy under Russian law? It presupposes the existence of judicially proven facts reflecting that a citizen or organization has absolutely no opportunities to satisfy the creditor's requests, even under conditions of restructuring and other possible benefits. In this case, as soon as all stages of bankruptcy are completed, the person or company acquires the appropriate status, and the debts are repaid through the sale of the borrower's property.
Thus, the citizen or organization that initiated the procedure in question is not initially considered insolvent from a legal point of view. But if at any stage of the bankruptcy process it turns out that they really can’t service the debt on terms acceptable to the lender, then ultimately the individuals acquire the appropriate status. They become legally declared bankrupt.
Let us consider how the stages of insolvency (bankruptcy) go if the borrower is an individual. It can be noted that the legislation of the Russian Federation regarding regulation of debt legal relations with the participation of citizens in the aspect of recognizing their financial insolvency is quite new. Previously, the laws fully regulated only the bankruptcy of organizations.
Features of the bankruptcy procedure for individuals
The initiation of the procedure in question begins with the appeal of the debtor or its creditor to the court. In some cases, government bodies can also join the process. The citizen must submit the corresponding application at the place of residence. At this point, his total debt should be 500 thousand rubles or more. Another criterion necessary to initiate bankruptcy proceedings is late payments for 3 months.
Having received a statement from a citizen, the court verifies its validity. If the appeal complies with the law, and the person has limited solvency, then the debt restructuring procedure is implemented , which involves easing the financial burden of the borrower. A financial manager is appointed to deal with issues related to all the key stages of the procedure in question. He does not do his work for free: it is supposed to pay a borrower a fixed amount of 10 thousand rubles, as well as transfer 2% of the funds that will ultimately be collected from the debtor in favor of the lender. The financial manager initiates subsequent stages of bankruptcy, in particular a meeting of creditors. Its participants must create a register of claims against the debtor.
Bankruptcy of individuals: restrictions
A citizen after initiating bankruptcy proceedings and receiving a relevant application by a court, in accordance with the law, cannot be a participant in certain types of legal relations. Also in relation to him, a number of restrictions are imposed on certain civic activities. So, for example, the debtor cannot transfer his property to the structure of the authorized capital of any company, act as the acquirer of shares or shares in companies. The borrower is also prohibited from entering into legal relations involving transactions that are gratuitous. A person cannot buy or sell securities, cars or other property if it costs more than 50 thousand rubles, or transfer property as a pledge - if the financial manager does not approve the relevant activities. It does not have the right to act as a creditor, to participate in the provision of guarantees.
The essence of restructuring
If we consider the key stages of bankruptcy from the point of view of financial recovery of the debtor, then restructuring can be singled out among them. It is characterized by the following features:
- accrual of any interest, penalties, as well as penalties or interest is terminated;
- enforcement proceedings (if any) are suspended if child support, redress, or return of property from illegal possession are not included in the requirements;
- financial claims of creditors are presented to the court.
As soon as the restructuring process is activated, the financial manager, as well as the lenders, are entitled to challenge the borrower's civil law transactions carried out by him for 3 years.
Restructuring plan
The most important component of restructuring is the corresponding plan. It can be drawn up if the debtor has a steady income, has not been previously declared bankrupt in the prescribed manner, and has also not been convicted of economic crimes. The plan in question includes information regarding the size, timing, and debt repayment algorithms.
The maximum duration of the restructuring plan is 3 years. The relevant document, as a rule, is prepared by the financial manager, and it must be approved by creditors. After the plan is agreed with the indicated participants in the legal relationship, it can be submitted to the court for approval.
If the document in question is not approved in the prescribed manner, then the citizen in this case must be declared bankrupt. But if the plan is approved by all subjects of legal relations within the framework of the procedure for recognizing the borrower insolvent, then this is accompanied by legal consequences:
- creditors cannot change the requirements for the debtor, which are approved in the plan, and also do not have the right to rely on compensation for losses accompanying the adoption and approval of the relevant document;
- if the court took certain measures related to securing creditors' requests, they are canceled;
- any penalties provided for non-fulfillment of obligations reflected in the restructuring plan are also canceled;
- the amount of the debt of the borrower increases in relation to the Central Bank refinancing rate (in percent per annum), while it is possible to reduce the corresponding amount by agreement of the parties.
The restructuring plan has a clear deadline. A month before its expiration, the financial manager must prepare a report reflecting how well the borrower's payment discipline is maintained according to the document. If a person cannot repay the debt in accordance with the plan, then the creditors, as well as the manager, can apply to the court with a request to cancel the document.
The court, having studied how a citizen fulfilled his obligations under the plan, makes a decision regarding the completion of such a stage of bankruptcy as restructuring, or cancels the document and declares the borrower insolvent.
Bankruptcy Recognition
So, if the plan in question is not executed by the debtor, the court will most likely approve the citizen in the status of bankrupt. After this, the borrower's obligations to creditors must be satisfied by the sale of his property. At the same time, there are categories of property that cannot be recovered.
If the bankruptcy is recognized by the court, the stages of subsequent activities of the subjects of legal relations involved in the relevant communications should be implemented within 6 months. For this period, a citizen may receive a ban on traveling abroad. Also, regarding its activities, some restrictions may be established. For example, a ban on opening accounts and deposits in financial institutions. The relevant powers are transferred to the financial manager.
The consequences of bankruptcy for individuals
To what extent will a citizen be able to exercise his rights after all stages of the bankruptcy procedure have passed? So, there are a number of nuances regarding the entry of a person into certain legal relations. For example, if a person declared bankrupt wants to take a loan within 5 years after the completion of the relevant procedure, he will have to notify the lender of his status. Also, within 3 years after the recognition of financial insolvency, a citizen cannot occupy high positions in the management structure of organizations.
Settlement agreement
One of the notable nuances that characterizes such a procedure as bankruptcy is a settlement. It can be interpreted in two ways.
First, through a settlement agreement, the creditor and the debtor can agree to write off the debt. Secondly, the relevant subjects of legal relations have the right to initiate the abolition of bankruptcy proceedings - also in court. In this case, the borrower continues to service the debt on terms acceptable to the lender.
Bankruptcy of legal entities
We examined the main aspects characterizing bankruptcy (stages, terms, participants in the procedure) in relation to individuals. We now study the specifics of recognition of the financial insolvency of organizations.
It can be noted that the main stages of bankruptcy of legal entities as a whole coincide with those that are characteristic of the corresponding procedure with the participation of citizens. In both cases, the main part of the activities is carried out by the same subjects of legal relations - the creditor, the borrower, the financial manager (in the case of legal entities - the arbitration), as well as the court. Among the procedures that necessarily accompany bankruptcy initiated in relation to a legal entity is the observation stage, aimed at ensuring the safety of the company's property. But there are other aspects of the insolvency process that are specific only to organizations. It will be useful to study them.
Bankruptcy of legal entities: amount of debt
Organizations at the bankruptcy stage (that is, those that experience objective financial difficulties associated with servicing debt) can go to court if their debt is more than 300 thousand rubles. As you can see, here the corresponding criterion is even lower than for individuals.
If the matter concerns strategic enterprises, as well as those organizations that have the status of natural monopolies, then the financial threshold for going to court is much higher for them - 1 million rubles.
Manager appointment
Legal entities initiating bankruptcy proceedings cannot choose a manager. Note that this rule appeared in the legislation recently. Before its introduction, as some experts note, organizations could appoint managers for acquaintance, that is, those people who would most likely show increased loyalty to them. At the same time, the creditor can express his opinion on the appointment of a person to the appropriate position.
Bankruptcy and Arbitration Decisions
Disputes involving legal entities are often carried out by arbitration courts. Their status differs significantly from state authorities. The legislation governing the bankruptcy of legal entities contains a norm according to which an application for insolvency is possible only if there is a writ of execution based on the decisions of the arbitration courts. This rule applies to lenders who are not registered in the prescribed manner as financial organizations specializing in the issuance of the appropriate type of loans. It can be noted that this norm previously appeared in judicial practice, but recently it has been fixed in the legislation at the federal level.
Responsibility of legal entities in bankruptcy
At any stage of bankruptcy of legal entities, employees of organizations holding key positions are responsible for providing the manager with all the necessary information, as well as for equal satisfaction of the interests of all creditors and correct behavior from the point of view of the law. If the officials of the companies in respect of which the bankruptcy procedure is committed commit violations, then administrative fines may be imposed on them. They can be about 100 thousand rubles.
We examined the key features and stages of bankruptcy for individuals and the distinctive features of the corresponding procedure for organizations. It can be noted that the legislation of the Russian Federation provides participants in legal relations in the field of loans with fairly fair legal tools to resolve problems related to debt repayment.