Bankruptcy of individuals

Bankruptcy of individuals

Only the debtor can file for bankruptcy

In the presence of property, with a debt of up to 1600 minimum calculation indices (MCI), the debtor files for judicial bankruptcy

No settlement is required for debts 5 years overdue

Types of bankruptcy proceedings

1. Extrajudicial bankruptcy (simplified form)
2. Judicial bankruptcy (by court decision)
3. Restoration of solvency (by court decision)

Extrajudicial bankruptcy procedure

(applicable for debts to second-tier banks, microcredit companies and collectors)

CONDITIONS:

1. No property, including common property
2. Settlement of overdue debts with the bank.

      Measures to settle and/or recover the debt must be carried out within eighteen months from the date of occurrence of the overdue debt.

3. Bankruptcy has not been applied for 7 years.
4. There were no repayments for obligations to creditors for twelve consecutive months on the date of filing such an application.
5. The debtor has the right to file an application if the debtor has been a recipient of state targeted social assistance during the six months preceding the date of filing the application.

Judicial bankruptcy proceedings

CONDITIONS:

1. Settlement of overdue debts with the bank.

Measures to settle and/or recover the debt must be carried out within eighteen months from the date of occurrence of the overdue debt.

2. Bankruptcy has not been applied for 7 years.
3. There were no repayments for obligations to creditors for twelve consecutive months on the date of filing such an application.

Procedure for restoring solvency

1. The debtor whose total obligations (including the ones which are not past due yet) do not exceed the value of the property owned by such debtor has the right to apply to the court only to request the implementation of the procedure for restoring solvency
2. The solvency restoration plan may be implemented ahead of schedule.
3. The solvency restoration plan provides for one or more of the following instruments:

1) change in the deadline for fulfillment of the obligation (deferral and/or payment of the debt in installments);

2) waiver of the debt or its part, including fines and penalties;

3) reduction of the interest rate for the loan;

4) reduction of the amount of regular current payments with a simultaneous extension of the total term of the loan agreement;

5) change of the method of fulfillment of the obligation;

6) satisfaction of the claims of the secured lender by transferring the pledged item to it, subject to the pardon of the obligations under the loan agreement by the secured lender;

7) other instruments not provided for in this paragraph.

4. The solvency restoration plan may include the following measures:

1) sale of part of the property;

2) lease (rental) of the property;

3) collection of receivables;

4) exchange of housing (transportation vehicle) for housing (transportation vehicle) of lower value;

5) sale of housing (transportation vehicle) with the subsequent purchase of housing (transportation vehicle) of lower value;

6) employment of the debtor;

7) other measures that do not contradict the legislation of the Republic of Kazakhstan.

5. The draft solvency restoration plan is sent for consideration to creditors whose claims are included in the register of creditors' claims. Creditors shall make proposals and remarks within ten business days from the date of receipt of the draft solvency restoration plan.

5.1. Proposals and/or remarks made later than the specified period shall be equivalent to the lack of proposals and remarks from the creditor.

Based on the results of extrajudicial and judicial bankruptcy

Consequences

1. Prohibition to receive loans from banks and microfinance organizations (except pawnshops) for 5 years
2. Repeated bankruptcy is possible after 7 years
3. Monitoring of the financial condition for 3 years after bankruptcy

No writing off of debt

1. Alimony payments
2. Compensation for damage caused to life or health
3. Compensation for damage related to criminal offenses, as well as payments to the budget collected under a court ruling.