Bankruptcy of individuals - procedure 2021

The bankruptcy procedure for individuals has been available to Russians since October 2015. However, many citizens still prefer not to answer the phone, to hide from debt collectors, but not to solve their problem. Mainly, people are afraid that they will be deceived, that their last money will be taken away and they will be left with the same debts. Fear comes from ignorance. In this article, we will tell you in detail how bankruptcy of an individual proceeds, who has the right to it, and how much money you need to have in your pocket in order to forever be free from debts to banks, tax authorities and utility companies.

Conditions for starting bankruptcy proceedings for an individual

The main question that people ask on thematic forums is: bankruptcy of individuals - how much is possible? Formally - from 500 thousand rubles. But it's not that simple. Bankruptcy of individuals is described by the federal law “On Insolvency (Bankruptcy)”, the corresponding Chapter 10 was signed by the President on December 29, 2014. Thanks to this, any Russian who meets the following conditions can now successfully get rid of debts:

The total debt exceeds 500 thousand rubles.
Payment obligations are not fulfilled for more than three months.
Official income is too low to pay off debt.

Related materials:

Federal Law “On Insolvency (Bankruptcy)” dated October 26, 2002 N 127-FZ

It is important to note that 500 thousand is the total debt. Usually people think that half a million must be owed to a specific bank, but this is far from the case. A potential bankrupt may have several credit cards, several debts to microfinance organizations, arrears on a consumer loan, and even non-payment of housing and communal services debts.

During the bankruptcy procedure, all debts will be considered not individually, but collectively

Some citizens think that if they borrowed 300 thousand rubles, then they will not be able to go bankrupt. This is wrong. If during a difficult financial situation a person did not pay utilities, taxes, and interest on loans and credits, the remaining amount may well accrue in a few months. The main thing is to approach the issue with a clear head and carefully calculate everything. However, independent bankruptcy of individuals is labor-intensive and troublesome. Therefore, a person who has exorbitant debts behind him has two options: wait until creditors come to him and describe all his property, or take action and contact a competent company.

Test
Do you doubt whether you will be declared bankrupt?
Take 5 minutes and find out for sure. Take the test

Duration

The less the debtor has the ability to pay for the services of specialists, the longer the bankruptcy procedure takes. Trying to figure out the procedure on your own results in a lack of time to work or search for other sources of income. As a result, the procedure itself may drag on for years, and the growth of debts and related problems will snowball.

SIGNS OF BANKRUPTCY

So, the bankruptcy procedure is neither cheap nor quick. And the desire to save money on specialists and delve into everything yourself can significantly complicate the debtor’s life.

INTENTIONAL BANKRUPTCY

How much does bankruptcy of an individual cost?

So, as we noted above, a potential bankrupt has two options: wait until all creditors sue him, take away his last and force him to pay until the end of his life, and then even take on his heirs. Or don’t wait for the collectors to knock on the door and start acting on your own. The best way out is to contact a bankruptcy company. Of course, you will have to pay for the services of a financial manager, lawyers and other people who help with bankruptcy. So how much does bankruptcy of an individual cost? As a rule, the cost of bankruptcy depends on the complexity of the procedure. The more creditors and debts, the more you have to pay. The price tag can scare away an unprepared person, because the average bill for bankruptcy is 150-200 thousand rubles. But there is no need to be afraid. Most law firms work in installments and allow you to pay the main part of the debt after completion of the procedure.

What you have to pay for during bankruptcy:

For services in property valuation and analysis.
For legal support (price may vary depending on the chosen company).
State fee for filing a claim in court (300 rubles).
Deposit for the services of a financial manager (25 thousand rubles).
Postal correspondence (about 12 thousand rubles during the entire procedure).
Publications on the EFRSB and in the Kommersant newspaper (about 15 thousand rubles).

Price

Citizens who have become familiar with the bankruptcy law believe that the greatest costs are incurred by paying for the services of a financial manager, which is fixed and amounts to 25 thousand rubles.

Unfortunately, the reality is somewhat different. In practice, citizens have to shell out about 100-150 thousand rubles for such services, otherwise finding a financial manager becomes problematic. Plus additional expenses, possible fines, legal fees, etc. also increase the amount of costs. As a result, it may simply become unaffordable for the debtor.

But if you try to save on the services of experienced lawyers and financial managers, you may encounter other risks. For example, the debtor's property may be sold significantly below its real value.

CHECKING THE CONTRACTOR

How to file bankruptcy for an individual yourself

The conditions for free bankruptcy of an individual are as follows:

Have a debt of 50 to 500 thousand rubles.
Have closed enforcement proceedings due to the lack of property and valuables.
Do not have other enforcement proceedings after the return of the writ of execution to the claimant.

However, this bill has many more pitfalls. In particular:

the procedure lasts a year, and if during this time the potential bankrupt finds additional income, you can forget about writing off debts.
Even if it’s not much, financial managers will still have to pay. No one will agree to work for free.
all year long, creditors will be looking for property, additional income and other valuables that can be taken to pay off the debt.
If at this time a person receives an inheritance, he will lose it to account for the debt.
Only those debts that the debtor indicated in the application will be written off. In case of judicial bankruptcy, all debts are written off.
During the procedure, you will not be able to sell your property: a ban will be imposed for a whole year.

As you can see, “free” bankruptcy has many more disadvantages than advantages. Therefore, it is easier to pay professionals, but complete the procedure in a few months and be completely debt-free.

Calculator
It is more profitable to write off debts than to return them to creditors.
See for yourself. Calculate the cost of bankruptcy

Sale of the debtor's property

The process of selling the borrower's property to write off debts will begin immediately after the arbitration court makes a decision to proceed with bankruptcy. An appraisal of the debtor's property will be scheduled.

If an individual during the bankruptcy process does not agree with the results of the property assessment, then it is possible to appeal it in court. To do this, you will need to submit a corresponding petition.

Next, the arbitration manager will begin the sale of the individual’s property. For this purpose, the property will be put up for auction.

What can be sold at auction:

Land.
Real estate.
Movable property.
Appliances.
Etc.

Jewelry and weapons will be sold at closed auction. Property that is more than 100,000 rubles will be put up for open auction. The entire proceeds will be used to satisfy the claims of creditors.

Bankruptcy of individuals - step-by-step instructions for 2021

What is the procedure? Personal bankruptcy is a helping hand for those who are mired in debt. A person who is unable to fulfill his obligations turns to a special company, where within a few months professional lawyers help him free himself from the claims of banks and debt collectors. And the first step to bankruptcy is to calculate all the pros and cons, weigh the risks and decide whether this is exactly what you want.

We recommend that you familiarize yourself with the Pros and Cons of Bankruptcy for Individuals

Many citizens fear that after the bankruptcy procedure they will no longer be able to contact the bank to obtain a car loan, mortgage or other loan. But that's not true. In theory, credit institutions should turn away from the bankrupt, but practice speaks for itself. Within a couple of years after the completion of the procedure, banks are willing to cooperate and issue car loans, mortgages and other loans to former bankrupts.

conclusions

In general, it can be said that legislative changes providing for the right of an individual to declare himself insolvent can certainly be considered useful for citizens. Bankruptcy became the only way out for those who found themselves “in a hole of debt” and did not know how to get out of this unpleasant situation.

Of course, bankruptcy is not a panacea. Perhaps the restrictions on rights faced by a bankrupt are not too severe. But they clearly cause significant damage to a citizen’s business reputation, and for some this is very painful. In addition, bankruptcy is associated with material losses and financial costs. But the citizen is freed from debt and gets the opportunity to rebuild his life.

So, before you decide to declare yourself financially insolvent in 2021, carefully weigh all the pros and cons of this step for yourself

How long does the bankruptcy procedure for individuals take?

If we talk about bankruptcy with the help of a specialized company, the procedure will take 7-8 months if the person does not have any property. If there is property, the procedure will take about a year. Self-inflicted bankruptcy can take several years. Professional lawyers usually voice the following deadlines:

collection of necessary documents - 1-2 weeks,
analysis of documents and drawing up an application - no more than one week,
the first court hearing is in one and a half to two months,
procedure for selling a citizen’s property – no more than six months,
publication in the EFRSB and Kommersant magazine - no more than three days.

The more property, the longer the procedure may take.

If documents are ready by the first meeting indicating that the potential bankrupt has nothing to take, the procedure will not be delayed for long. If the potential bankrupt turns out to be the owner of houses and ships, the sale period may be extended every six months.

It's long

The consequences of bankruptcy of an individual will not occur as quickly as we would like. First, you still need to try to get the status by going through a long procedure. If you hire a support company, things will go faster. If you start acting on your own, your time costs will increase by at least 1.5 times.

How it all happens:

Collection of papers. There are very, very many of them; you can collect them yourself for months. And if you do not collect everything or do it correctly, you will also be denied consideration of the case - this is again time to correct the situation.
Court consideration of the possibility of bankruptcy. If it is real, the search for a financial manager begins.
A time is set for the next meeting, for which the financial manager must prepare, study the case materials, the financial side of the “ward’s” life, and draw up an action plan.
The meeting reviews the plan and the information collected. If the plan does not suit the judge, a time is set for its adjustment. Or the judge immediately decides to declare the applicant bankrupt.
Next, the financial manager begins the sale of the debtor’s property.

This is a rough plan; there may be more meetings. Prepare for the fact that you will actually become bankrupt approximately 1.5-2 years after you start collecting documents.

Consequences of bankruptcy for individuals

What are the consequences of bankruptcy for individuals? Articles on the Internet scare potential bankrupts with a moratorium on applying to banks for borrowed funds. On forums, people say that banks, when they hear that you are bankrupt, simply hang up. Experts say this is not so. Bankruptcy of individuals completely “resets” the credit history, and the ban on bankruptcy in the next five years even reduces the risk of being denied a new loan. The lender understands that you will not be able to get rid of this debt in the near future, which means that the likelihood of non-repayment of funds is reduced. But there are a number of other real consequences that will make individual citizens think about whether they need this procedure.

All consequences of bankruptcy of an individual are described in Federal Law-127:

The bankrupt will not be able to repeat the procedure for five years after receiving this status;
During the procedure, a potential bankrupt cannot count on credits or loans. And then you must always indicate your bankruptcy status in applications;
For three years after the procedure, he cannot hold positions in the management bodies of a legal entity;
Cannot apply for a position in a credit institution for 10 years;
For 5 years he cannot get a job in an insurance organization.

Consequences of bankruptcy of an individual for individual entrepreneurs

Very often, individual entrepreneurs become bankrupt. Statistics show that two out of three micro-businesses fail, and the average lifespan of an individual entrepreneur in Russia is about eight years. Circumstances change, not everyone keeps up with progress, trends and markets, and now a seemingly successful entrepreneur is left alone with the debts he took on to develop his business. Since an individual entrepreneur is liable to creditors with his property, he must go bankrupt as an individual. From here, in addition to all of the above, come the following consequences:

The individual entrepreneur loses the status of an individual entrepreneur.
All licenses received by individual entrepreneurs to conduct all types of activities are cancelled.
A person is prohibited from holding the position of director of a company or manager in any organization.
Ex-individual entrepreneurs are prohibited from holding positions in insurance and credit organizations.

Comments: 4

Your comment (question) If you have questions about this article, you can tell us. Our team consists of only experienced experts and specialists with specialized education. We will try to help you in this topic:

Author of the article: Klavdiya Treskova

Consultant, author Popovich Anna

Financial author Olga Pikhotskaya

Anna
08/09/2021 at 17:13 useful material
Reply ↓
Basil
04/12/2021 at 17:26
“There is no point in keeping silent about any debts or, on the contrary, exaggerating them; all data will be double-checked. “What’s the point of submitting a list of debtors at all if Big Brother already knows everything?
Reply ↓
Oleg
03/24/2021 at 03:10
Quite a complete summary. I searched a lot, but often I come across rewrites from people who don’t know. Everything is complete here and there are links for deeper reading. Well done Claudia (with such knowledge, you can write your middle name).
Reply ↓
Klavdiya Treskova
03.30.2021 at 21:17 Post author
Thank you very much, Oleg, for your positive review of the material, I hope it was useful for you.
Reply ↓
Read also: Conditions for the return of the insurance premium upon early repayment of the loan

Secrets of personal bankruptcy

According to citizens who have already managed to free themselves from debt, the main mistake they have made in life is turning to professionals for help too late. If you believe judicial practice, even if formally falling under all the conditions of bankruptcy, no more than 10% of people who filed an application on their own were able to obtain this status on their own. In the process, they had to meet more than once with collectors, bailiffs and other authorities eager to remove the last one from their only home as a debt. The help of lawyers in this regard makes the task much easier: pre-collected documents about the absence of valuable property eliminate unwanted visits and save both effort and time.

Contact the specialists

To ensure that the entire bankruptcy process does not cause you any trouble from the very beginning, we recommend paying close attention to all its stages. The ideal option is the help of a qualified specialist.

So, by contacting the RosCo company, which provides a wide range of services, namely: legal, auditing, accreditation, accounting, registration, personnel, you can be sure that the documents drawn up with our professional participation will meet all the necessary requirements and are guaranteed to protect You from any surprises.