Having debts to banks, microfinance organizations (MFOs), or other creditors does not automatically mean that a citizen can declare bankruptcy.
Bankruptcy legislation establishes clear requirements, and before submitting an application, it is necessary to check whether the relevant criteria are met.
The State Revenue Department for Almaty explains that bankruptcy is not the only way to resolve debt problems. For citizens who have a stable income and are able to repay their debts gradually, a solvency restoration procedure is available.
The legislation of the Republic of Kazakhstan provides for three procedures:
out-of-court bankruptcy;
judicial bankruptcy;
restoration of solvency.
Out-of-Court Bankruptcy
This procedure applies to debts owed to banks, microfinance organizations, and collection agencies.
Requirements for the out-of-court bankruptcy procedure:
the total amount of debt must not exceed 1,600 MCI;
there must be no registered property, including property held in joint ownership;
the debt must have remained unpaid for 12 consecutive months;
a debt settlement procedure with the creditor must have been completed;
no bankruptcy procedure must have been applied to the citizen during the previous 7 years.
How to submit an application:
An application may be submitted through the eGov.kz portal, the eGov Mobile application, or at Public Service Centers (PSCs).
Judicial Bankruptcy
This procedure is carried out exclusively through the court and applies in cases provided for by law, including where the amount of debt exceeds 1,600 MCI.
Key features of judicial bankruptcy:
unlike out-of-court bankruptcy, this procedure covers debts not only to banks and MFOs, but also to other creditors, such as tax debts;
the procedure may involve the sale of the debtor’s property to cover outstanding obligations;
expenses related to the payment of the state fee and the services of a financial manager are предусмотрены.
Restoration of Solvency
This procedure is intended for citizens who have a stable income and are able to repay their debts gradually.
Key advantages:
the main advantage is that the citizen does not acquire bankrupt status;
the court may approve an individual debt repayment plan for a period of up to 5 years, under which the citizen settles their debts.
Consequences and Restrictions After Bankruptcy
After a citizen is declared bankrupt, the current legislation provides for the following restrictions:
new bank loans and microloans cannot be obtained for 5 years;
bankruptcy procedures may be used again only after 7 years;
the citizen’s financial condition is monitored by the state for 3 years.
The most important thing is to realistically assess your income and choose the appropriate procedure.
This will help resolve debts legally and avoid unnecessary financial problems in the future.
