Legal assistance in case of an individual’s bankruptcy
Certain rules are defined by the Law on bankruptcy of individuals:
-A bankrupt is an individual whose debt exceeds the amount of 500 thousand rubles;
-The court is entitled to let a borrower to pay by installments for a period up to 3 years, during which the latter is bound to cover his debts.
In case if the monetary funds are not reimbursed to the creditors within the indicated term, the debtor is considered as a bankrupt and the debt settlement is carried out at the expense of the debtor’s property.
It is worth mentioning that financial insolvency can be initiated by an individual himself, as well as by his creditors or by his heir after the individual’s decease.
As far as a bankruptcy claim is concerned, it can be filed in case of a lesser amount of debt. In this case the action shall be initiated if:
-the amount of the debt reaches a limit indicated by the law;
-The amount of the debt exceeds the cost of the individual’s property.
It is also important to mention that the matter of individuals’ insolvency is decided by:
-general jurisdiction courts – if an individual is concerned;
-arbitration (commercial) court – if an individual entrepreneur is concerned.
Moreover, the fact of bankruptcy being stated, the debtor’s property shall be included into the bankruptcy assets to be sold off at a public auction. Nevertheless, there are a number of exceptions, as follows:
-lawsuit does not cover the sole residential property, the bankrupt’s personal property and foodstuffs;
-if the individual possesses some property mutually with other persons, it shall be subject to partial withdrawal only;
If a part of creditors’ claims stays without satisfaction because of the lack of property, the rest of the payment claims are considered to be automatically settled.
Thus, after the debtor individual is able to settle with the creditors against his property, the judge will state all the claims upheld and the case of bankruptcy closed.