Today, on August 20, a briefing "Application of the procedure for restoring the solvency of citizens" was held at the Regional Communications Service.
During the briefing, the head of the department for work with insolvent debtors of the Department of State Revenues in the Akmola region, Tobyl Demesinov, explained that one of the mechanisms provided for by the legislation of the Republic of Kazakhstan for citizens who find themselves in a difficult financial situation is the procedure for restoring solvency.
The Law of the Republic of Kazakhstan "On the Restoration of Solvency and Bankruptcy of Citizens" provides for a procedure for restoring solvency.
Who can use the procedure?
The procedure for restoring solvency is applied in court.
The grounds for a citizen's appeal to the court are:
- the excess of the value of the property belonging to him in the amount of all obligations, including those whose due date has not yet come;
- and/or availability of stable income.
Thus, this procedure is primarily intended for citizens who have a real opportunity to restore solvency, for example, through wages, business income, the sale or lease of part of the property, or changes in the terms of repayment of existing debts.
To date, 61 debtors are undergoing this procedure, with a total debt of 695.9 million tenge.
How does the procedure start?
A citizen independently applies to the court at his place of residence.
The application can be submitted in writing or in the form of an electronic document.
The application must indicate the name of the court to which the application is submitted, justify the impossibility of satisfying the claims of creditors and attach the necessary documents.
In particular, the following shall be provided:
- a list of all creditors and debtors indicating the amounts owed;
- documents confirming the debt;
- inventory of property;
- if available - property valuation report;
- list of civil and/or other obligations for the last three years;
- documents confirming the adoption of measures to settle debts with banks and microfinance organizations.
At the same time, a debt settlement document is not required if a bank loan or microcredit agreement is concluded before January 1, 2025, or 12 months have passed since the occurrence of overdue debt.
What happens after the initiation of the case?
After the court makes a decision to initiate proceedings, a number of important legal consequences arise.
First of all, the deadlines for the fulfillment of debt obligations specified by the citizen in the application are considered to have come.
Creditors are prohibited from requiring the debtor to fulfill these obligations outside the framework of the procedure.
The accrual of forfeit - penalties and fines - and remuneration for the corresponding debt is also terminated.
It is not allowed to recover money from the debtor's bank accounts and foreclose on his property in the usual manner.
Executive documents in relation to the property of the debtor are suspended.
Also, creditors are prohibited from applying debt collection measures provided for by law.
The financial manager participates in the procedure.
He collects information about the financial condition of a citizen, analyzes his property, income, obligations and the possibility of restoring solvency.
The financial manager within ten working days from the date of the court ruling on the initiation of the case conducts an inventory of the debtor's property.
Based on the results of the analysis, the financial manager draws up an opinion.
In conclusion, one of three conclusions can be made:
first, the debtor is insolvent and there are grounds for restoring solvency;
second, the debtor is insolvent and there are grounds for applying judicial bankruptcy;
third, the debtor is solvent and there are no grounds for applying procedures for restoring solvency or judicial bankruptcy.
The opinion of the financial manager is submitted to the court within 20 working days from the date of the decision on the initiation of the case.
At the same time, the final decision on the application of the procedure is made by the court.
If the court decides to apply the solvency recovery procedure, the financial manager is instructed to prepare a solvency recovery plan.
Such a plan must be submitted no later than two months from the date of entry into force of the court decision.
Within one month from the date of entry into force of the court decision, the financial manager, together with the debtor, develops a draft plan.
After that, the project is sent to creditors.
Lenders have 10 working days to submit their proposals and comments.
After considering the proposals of creditors, the financial manager forms a final plan and sends it to the court.
What might the solvency recovery plan contain?
The law provides a fairly wide range of tools.
The plan may include:
- deferral or installment payment of debt;
- forgiveness of the debt or its part, including fines, penalties and penalties;
- reduction of interest rate on the loan;
- decrease in the amount of monthly payments with an increase in the total maturity;
- change in the method of performance of the obligation;
- transfer of the collateral to the creditor subject to forgiveness of obligations under the loan agreement;
- use of other legal instruments.
In addition, the plan may provide for specific activities of the debtor himself.
For example:
- sale of part of the property;
- lease of property;
- collection of receivables;
- exchange of housing or car for property of lower value;
- sale of housing or a car with subsequent acquisition of property of a lower value;
- employment of the debtor;
- other measures not contradicting the legislation.
Thus, the plan for restoring solvency is formed individually, based on the real financial situation of a particular citizen.
The term of execution of the solvency recovery plan, as a rule, should not exceed five years.
In this case, the plan can be executed ahead of schedule.
For example, if a citizen's income has increased after a certain time, he received property or otherwise was able to repay the obligations stipulated by the plan ahead of schedule, the procedure can be completed ahead of schedule.
Who approves the plan?
The final plan is being considered by the court.
A court approves a plan if:
- there are no proposals and comments of creditors;
- all proposals and comments of creditors are taken into account;
- calculations show that the implementation of the plan will ensure that creditors satisfy claims in an amount not less than they would have received when the solvency restoration procedure was terminated and bankruptcy proceedings were applied.
That is, when approving the plan, the interests of not only the debtor, but also creditors are taken into account.
What happens after the plan is approved?
After the entry into force of the court ruling on the approval of the plan, the debtor's obligations are fulfilled already in accordance with the approved plan.
The accrual of remuneration for loans received is terminated.
Based on the court ruling, restrictions on the debtor's property can be lifted.
At the same time, the debtor is prohibited from making transactions on the alienation of property and taking on new obligations that are not provided for by the plan.
It is also forbidden to receive new loans, with the exception of pawnshop microloans, as well as issue guarantees and sureties.
Once the plan is approved, the authority of the financial manager is terminated.
The citizen carries out the further execution of the plan independently.
As a result, a person gets the opportunity to continue working, receive income and gradually pay off the debt in accordance with the plan approved by the court.
Representatives of the media asked questions of interest to them, to which they received comprehensive explanations.
