December 27, 2022

Who is declared bankrupt in Kazakhstan – amendments are being made to the legislation

The deputies of the Majilis approved the bill “On the restoration of solvency and bankruptcy of citizens of the Republic of Kazakhstan” and the accompanying bill in the second reading.

“The main draft law provides for the possibility of applying three types of bankruptcy procedures in order to restore a citizen’s solvency — out-of-court bankruptcy, judicial bankruptcy and restoration of solvency. It is assumed that persons who have debts up to 1600 MCI will fall under the out—of-court bankruptcy procedure,” Majilis deputy Denmark Espayeva said at the plenary session of the chamber.

To do this, according to her, it is necessary to comply with several conditions, including:

— debt to banks, microfinance organizations, collection agencies should not exceed the amount of 1600 MCI;

— the debtor has no property on the right of ownership, including property that is in common ownership.

— there is no repayment to creditors within 12 months on the date of filing the application.

— the citizen needs to take measures to settle the debt with the bank.

“The procedure for restoring solvency provides for the debtor the opportunity to receive in court an installment payment for debts up to five years in the presence of income and property. The recovery plan is developed jointly with the financial manager and approved in court. This requires the consent of both parties – the debtor and the creditor,” the deputy explained.

During the consideration of the draft law, in order to improve certain norms of the main draft law, amendments were also adopted, including:

— increase to 18 months of the period allotted for the settlement and recovery procedure;

— the possibility of applying the bankruptcy court procedure by citizens who have property for obligations not exceeding 1600-fold MCI.

— exclusion of the norm granting the authorized body the right to prohibit the debtor from leaving the Republic of Kazakhstan during the out-of-court bankruptcy procedure, as well as the rules on conducting financial literacy courses after the bankruptcy procedure is completed;

The sectoral legislative acts of the Republic of Kazakhstan have been brought into line with the norms of the main draft Law.

Responsibility is established for the deliberate application of a citizen to apply for bankruptcy for the purpose of avoiding fulfillment of their obligations to creditors, as well as for providing false information or concealing it within the framework of bankruptcy.

Also, within the framework of the accompanying bill, amendments were adopted aimed at tightening the regulation of collection activities, the correspondent of MIA “Kazinform” reported.