The Law "On Restoration of Solvency and Bankruptcy of Citizens of the Republic of Kazakhstan" provides two main procedures for individuals in financial distress. Here are the key differences:
🔹 1. OUT-OF-COURT BANKRUPTCY (For smaller debts) This procedure is conducted without court involvement through an authorized body.
- Debt Amount: Must not exceed 1,600 times the monthly calculation index (MCI) established by the law on the republican budget.
- Property: The debtor must have no property in ownership, including shares in joint property.
- Creditors: Applies only to obligations toward banks, microfinance organizations (MFOs), and debt collection agencies.
- Where to Apply: Through the "Government for Citizens" State Corporation, the "digital government" web portal, or a specialized mobile application.
- Duration: Lasts for 6 months from the date information about the debtor is posted.
🔹 2. JUDICIAL BANKRUPTCY (For large debts and presence of property) Cases are considered in court at the debtor's place of residence.
- Debt Amount: Generally exceeding 1,600 times the MCI. However, one may apply with a lower amount if they do not meet the criteria for out-of-court bankruptcy (e.g., if they own property).
- Property: Creditors' claims are satisfied through the debtor's estate (property mass).
- Creditors: Includes all types of creditors, such as individuals and other organizations.
- Special Feature: Mandatory involvement of a financial manager.
- Duration: No more than 6 months from the date the court decision takes legal effect, though it can be extended for another 6 months.
⚖️ COMMON REQUIREMENTS:
- No debt payments made within the last 12 months.
- Mandatory debt settlement procedure with the bank or MFI prior to submitting the application.
- Bankruptcy can be applied no more than once every 7 years.
⚠️IMPORTANT CONSEQUENCES:
- A 5-year ban on taking out new loans (excluding pawnshops).
- Financial monitoring of the bankrupt for 3 years following the completion of the procedure.
- Obligations regarding alimony and compensation for harm caused to life or health cannot be discharged under any circumstances.
Choose the procedure consciously and keep the consequences in mind! 📉
