Loan Payments Have Become Unmanageable
Income is no longer enough to cover ordinary living expenses while also meeting obligations to banks or other creditors.
PERSONAL BANKRUPTCY
Personal Bankruptcy
We help determine whether bankruptcy is suitable for you and what consequences it may have for debts, property, a mortgage and family assets. If court proceedings are required, we prepare the application and handle the case in a Russian commercial court through resolution of the issue of discharge from obligations.
If your situation meets the statutory conditions for out-of-court bankruptcy through an MFC, we will tell you this before starting a paid court-bankruptcy procedure.
WHEN AN ASSESSMENT IS NEEDED
What Is Your Situation?
You Have Several Loans and Borrowings
Payments are spread among different creditors, arrears arise, and penalties and new claims accumulate.
The Debts Are Already in Enforcement
Enforcement proceedings have been opened, funds are being withheld or restrictions imposed, and the next scenario needs to be assessed.
You Own an Apartment, Vehicle or Other Property
Before filing, it is necessary to understand what property enters the bankruptcy estate, what is protected by law and where there is a risk of realization.
You Have a Mortgage
The mortgage loan, the status of the residence and the possibility of preserving the sole mortgaged residence under the conditions provided by law need to be assessed separately.
There Is Property Acquired during Marriage
It is necessary to consider not only property registered personally to the debtor, but also the debtor’s possible share in the spouses’ joint property.
A Creditor Filed for Your Bankruptcy
The creditor’s claims, the stage of the case, property and obligations need to be reviewed and the citizen’s position in the already commenced proceedings determined.
You Want to Know Whether MFC Bankruptcy Is Available
The amount of debt and whether one of the special statutory grounds for the out-of-court procedure exists need to be checked.
Nikolay NemkovManaging Partner, Konsultant Law Firm
Managing Partner’s Commentary
Nikolay Nemkov on Personal Bankruptcy
Why, before filing, it is necessary to review not only the amount of debt, but also property, transactions, a mortgage, family assets and obligations that may remain even after the procedure is completed.
Key Points
- 01What debts you have and whom you owe
- 02What property belongs to you and your family
- 03What consequences the procedure will actually create
BEFORE FILING
Consequences First. Bankruptcy Second.
Bankruptcy affects more than debt. Court proceedings affect the citizen’s property, transactions, relationships with creditors and, in some cases, the spouses’ joint property. The right question before filing is therefore not “how much debt will be written off?” but “what will happen in my specific situation?”
01
Debts
We identify creditors, amounts, the grounds of obligations, enforcement proceedings and the current stage of recovery.
02
Property
We review real estate, vehicles, shares, bank accounts and other assets that may be relevant in the procedure.
03
Transactions
We analyze significant transactions involving property and funds during the period that may be reviewed in the bankruptcy case.
04
Appropriate Procedure
We determine whether court bankruptcy is required or whether the situation meets the conditions for the out-of-court procedure through an MFC.
WHAT WE DO
What Our Court-Bankruptcy Support Includes
Legal Audit of the Situation
We analyze debts, property, income, enforcement proceedings, marital status, mortgage obligations and significant transactions.
Risk Review before Filing
We explain which assets may be affected by the procedure, which obligations may remain and which circumstances require additional assessment.
Preparation of Documents
We prepare information on creditors and debtors, property, income and other documents required for a citizen’s application to a Russian commercial court.
Preparation and Filing of the Application
We prepare the application to declare the citizen bankrupt and the procedural filing package for the Russian commercial court.
Court-Case Support
We prepare the position and documents on issues arising during the case and handle the progress of the procedure.
Interaction during the Procedure
We handle legal issues arising in work with the financial administrator, creditors, claims and the citizen’s property.
Completion of the Procedure
We handle the case through the court act completing the applicable procedure and resolving the issue of discharge from further performance of obligations.
TWO PROCEDURES
Court or Out-of-Court Bankruptcy
Court Bankruptcy
Russian Commercial Court
Court bankruptcy is conducted under Chapter X of the Bankruptcy Law. A financial administrator must participate in the case. Depending on the circumstances, the court applies the procedures provided by law, while property and creditors’ claims are considered within the court case.
Out-of-Court Bankruptcy
Through an MFC
The out-of-court procedure is not available to every debtor. The law sets the amount of debt taken into account at RUB 25,000 to RUB 1,000,000 and requires at least one of the special statutory grounds connected with enforcement proceedings or the citizen’s status.
RUB 25,000–1,000,000range of debt taken into account for out-of-court bankruptcy
We first check the conditions for the free out-of-court procedure. If they are met, we do not recommend court bankruptcy simply in order to sell a legal service.
PROPERTY
What Happens to Housing and Other Property
Sole Residence
Property that cannot be subject to enforcement by law is excluded from the bankruptcy estate. The issue of the sole residence suitable for living is assessed in light of enforcement-immunity rules and the circumstances of the particular case.
Mortgaged Residence
The mere fact that a mortgaged apartment is the debtor’s sole residence does not create unconditional immunity from the secured creditor’s claims. At the same time, the Bankruptcy Law provides for a separate settlement agreement with the mortgage creditor which, if the statutory conditions are met, may allow the debtor to preserve the sole mortgaged residence and continue performing the mortgage obligation.
Spouses’ Joint Property
The citizen’s share in the spouses’ joint property may be relevant in the procedure. Family property and the history of its acquisition should therefore be analyzed before filing.
EXPERT COMMENTARY
Comments and Publications on This Practice Area
Nikolay Nemkov and the experts at Konsultant Law Firm comment in the media on issues related to this practice area.
Not Your Share: What a Bankrupt Debtor Receives When Mortgaged Housing Is Sold
Read Publication →Konsultant Law Firm
The firm has been practicing since 2007. We handle litigation and complex legal matters for businesses in Krasnoyarsk, Moscow and other regions of Russia.
Since 2007
in legal practice
1,000+
court proceedings
Across Russia
Krasnoyarsk • Moscow • other regions
Bankruptcy Is Not an Automatic Write-Off of Every Debt
After settlements with creditors are completed, the law provides for discharge of a good-faith citizen from further performance of a substantial part of the claims. But there are exceptions to this rule, and in certain cases the court may decline to apply discharge from obligations at all.
Before filing, it is therefore important to review not only whether the procedure can be commenced, but also the composition of the debt, the debtor’s good faith and the circumstances in which the obligations arose.
CLIENT TESTIMONIAL
After Bankruptcy — Debt-Free
Khamitov
Khamitov — client of Nikolay Nemkov
“Now I am debt-free and can use my bank cards normally.”
The Procedure Is Complete — It Is Possible to Return to Ordinary Life
Khamitov turned to Nikolay Nemkov for assistance with a personal-bankruptcy procedure. According to the client, the procedure lasted about a year and a half.
After it was completed, the client highlights what matters most to him: the debts are gone, and he can once again use bank cards normally.
There are no complicated legal terms in this testimonial. The client describes the result of the procedure in the way he experiences it in everyday life.
Bankruptcy Ends Not with the Court Act, but with a Return to Normal Financial Life
For a person, the result of the procedure is not only a completed court case, but also the ability to use ordinary financial tools again without the previous debt pressure.
How We Start Working on the Matter
01We Build the Financial Picture
Debts, creditors, income, property, enforcement proceedings, mortgage obligations and marital status.
02We Review Property and Transactions
We identify assets and circumstances that may be relevant to the procedure and creditors.
03We Determine the Appropriate Procedure
Court bankruptcy, the out-of-court MFC procedure or another way of addressing the debt situation.
04If Court Proceedings Are Required, We Prepare the Case
We assemble the documents, prepare the application and begin court support for the procedure.
MANAGING PARTNER
Konsultant Law Firm Lawyers
Managing Partner, Konsultant Law Firm
Nikolay Nemkov
More than 20 years of practice in complex property and corporate disputes. Practicing insolvency practitioner.
Questions about Personal Bankruptcy
Can I file for bankruptcy myself if the debt is less than RUB 500,000?
Yes, in certain circumstances. A citizen may apply to a Russian commercial court when bankruptcy is foreseeable if there are circumstances clearly showing that the citizen will be unable to perform monetary obligations by the due date and there are also signs of insolvency or insufficiency of property. RUB 500,000 is therefore not a universal minimum threshold for a debtor’s voluntary filing.
When is a person required to file for bankruptcy?
Article 213.4 of the Bankruptcy Law requires a citizen to apply to a Russian commercial court if satisfying the claims of some creditors makes it impossible to perform obligations to other creditors in full and the total amount of the relevant obligations is at least RUB 500,000. In that case, the application must be filed no later than thirty business days after the citizen learned or should have learned that these circumstances had arisen.
Who qualifies for out-of-court bankruptcy through an MFC?
The out-of-court procedure applies where the total amount of monetary obligations and mandatory payments taken into account is from RUB 25,000 to RUB 1,000,000 and only where at least one of the special grounds under Article 223.2 of the Bankruptcy Law exists. These grounds are connected, in particular, with a specified status of enforcement proceedings, certain categories of citizens and the duration of an unperformed enforcement document. The amount of debt alone is not sufficient for an MFC application.
Are absolutely all debts discharged after bankruptcy?
No. The law contains claims that remain after bankruptcy is completed. These include, in particular, alimony, claims for harm to life or health, certain claims inseparably connected with the creditor’s personality, current payments, and certain claims for subsidiary liability and damages. In addition, where the circumstances of bad-faith conduct specified by law are established, the court may decline to discharge the citizen from obligations.
What happens to property in court bankruptcy?
When realization of assets is introduced, property that is subject to realization under the law is included in the bankruptcy estate. Property that cannot be subject to enforcement is excluded from the bankruptcy estate. Real estate, vehicles, shares, spouses’ property, pledged property and earlier transactions must be analyzed separately.
Can the sole mortgaged apartment be preserved?
A sole mortgaged residence is not protected from the secured creditor’s claims merely because it is the debtor’s only residence. However, since 2024 the Bankruptcy Law has provided for a separate settlement agreement between the citizen and the mortgage creditor in relation to the sole mortgaged residence suitable for permanent living. After the court approves such an agreement, the residence is not included in the property subject to realization if the statutory conditions are met, while the mortgage obligation continues to be performed. Whether this solution is available must be assessed for the specific loan and the mortgage creditor’s position.
What restrictions remain after court bankruptcy?
For five years after completion of realization of assets or termination of proceedings during that procedure, when entering into a credit agreement or loan agreement the citizen must disclose the fact of bankruptcy. For five years, the citizen also cannot commence another bankruptcy case on the citizen’s own application. For three years, there is a restriction on participation in management of a legal entity; the law provides longer periods for certain financial organizations.
We Will Check Whether Bankruptcy Is Suitable for You
State the approximate amount of debt, whether enforcement proceedings have been opened, what property is registered in your name and whether you have a mortgage. Before proposing a court procedure, we will first assess its consequences and whether out-of-court bankruptcy through an MFC is available.