Bankruptcy through the MFC: what debts can be written off

What is bankruptcy? Bankruptcy helps to legally get rid of debts when there is no way to pay off. A difficult life situation can become the cause of bankruptcy: illness, dismissal, disability, death of loved ones.

What is the difference between out-of-court bankruptcy? Bankruptcy through the court can take from several months to several years, and the terms of the out-of-court procedure are strictly limited by law – this is exactly 6 months. But the amount of debts is strictly limited here – from 50 to 500 thousand rubles.

But you can submit an application to the MFC and you do not need to pay for it, and if you go bankrupt in court, it will cost at least 25,300 rubles, but in practice it is usually more.

Another difference is that an out-of-court bankruptcy procedure is possible only if two conditions coincide. First, enforcement proceedings must be completed in relation to the debtor due to the fact that he does not have property that can be recovered against the debt. Secondly, there should be no other enforcement proceedings.

How to count your debts?

The calculation of the total amount includes several types of debts, including all loans and credits (plus interest), taxes and fees, surety agreements and alimony. The amount of the debt is determined on the day the application is submitted to the MFC. To find out your debts on loans and borrowings, you can contact creditors, data on debts to the tax office can be found on the FTS website, for car fines – on the traffic police website, information on enforcement proceedings – on the FSSP website. All together you can see on “Gosuslug”.

How do I apply?

The application is submitted to the MFC, it is necessary to attach a list of all creditors known to the debtor in the prescribed form with the exact amounts of debts. If some debt is not included in the list, it will not be written off.

How is the procedure going?

The MFC will check the documents and if they find out that the applicant is suitable according to the criteria, then within three working days they will include him in the Unified Federal Register of Bankruptcy Information. From that moment on, the collection and accrual of interest and fines is suspended for six months. But not all: the rule does not apply to alimony debts, debts for compensation for harm to life and health, moral harm, wage and severance pay debts and debts not indicated in the list attached to the application. And restrictions are imposed on the future bankrupt: he has no right to receive loans, take loans, issue guarantees.

If during these six months the debtor has property or income that makes it possible to fully or in large part to pay off the debts, then he must inform the MFC about this within five working days. Then the procedure will stop.

Also, the extrajudicial procedure will stop if the court begins. This can happen if one of the creditors is not listed in the list attached to the application, the debt is understated, the debtor found property that he did not report, the court declared the debtor’s transaction invalid at the creditor’s claim.

It is possible to re-submit an application to the MFC only 10 years after the termination of the out-of-court procedure, but during this period, creditors themselves can initiate bankruptcy in court.

Six months later, the MFC includes information on the completion of the procedure in the register: the debtor is released from obligations to creditors in the amount specified in the application.

What debts will not be written off?

Not specified in the list attached to the application, which arose during the procedure of extrajudicial bankruptcy, as well as debts for compensation for harm to life, health or property, moral harm, for payment of wages and severance pay, for alimony, for compensation for losses caused to a legal entity whose participant was the debtor, as well as when brought to subsidiary liability (for example, for bringing the organization to bankruptcy).

Also, debts will not be written off if it turns out that, upon the occurrence or fulfillment of obligations, the debtor committed fraud, maliciously evaded payments, provided the creditor with deliberately false information, concealed or destroyed property. And if the court establishes the fact of unlawful actions in bankruptcy or fictitious bankruptcy, then the debts will not only not be written off, but they can be brought to justice, up to criminal (up to six years in prison).

Consequences of bankruptcy

For 5 years, you cannot take loans and borrowings without indicating the fact of bankruptcy;
You cannot hold positions in the management bodies of a legal entity for 3 years;
For 10 years, you cannot hold positions in the management bodies of a credit institution, a state pension fund, a management company of an investment fund, a mutual investment fund and a non-state pension fund or a microfinance company;
For 5 years, it is impossible to register an individual entrepreneur, carry out entrepreneurial activity and manage a legal entity if the debtor was an individual entrepreneur and ceased to be less than a year before filing an application for out-of-court bankruptcy.

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