ECHONOMICS: why the draft law on bankruptcy of individuals is not yet prepared

A draft law, which is supposed to endow the employees with the right to request the courts of arbitration to rule the indebted employers bankrupt, has been submitted to the State Duma. The Government of the Russian Federation has suggested the amendments to the Federal Law “On insolvency (bankruptcy)”. The authors point out that the changes are aimed at increasing the protection of the employees’ rights to wages and stimulating the employer to timely pay those, even if risking bankruptcy. Only civil law obligations are currently taken into account, when bankruptcy cases are initiated. The situation with the law on bankruptcy of individuals is different. Its draft has not been drawn up yet.

Expert’s commentary

Advocate Alexander Bolomatov, Associated Partner of the Law Firm "YUST"

The project’s concept and not its content is key. Bankruptcy is the individuals’ way to get rid of their debts, that is – of their burden, their need to perform their obligations to the creditors. The banks are the main entities interested in not letting such debts be eliminated; they are interested in that the person pay the respective debts. The situation, when a person is forced to perform his obligations to the end, is far better for the creditors.

The citizens are of the opposite opinion: they are interested in getting rid of some debts in a reasonable time and starting their life anew. That is why, in my opinion, the situation around the draft law is at a dead end.

The recording of the expert’s opinion is available: Echo Moskvy, Echonomics, 17.07.2013 (on air at 14:35).