The Law "On Bankruptcy of Individuals" came into force in 2015. But to this day, it causes distrust among citizens: the possibility of becoming bankrupt is considered by many to be an unrealizable dream. Citizens are also interested in whether this law can be retroactive.
Bankruptcy law
If a person is declared bankrupt in accordance with the established procedure, he is released from debts in full. When a bankruptcy case is accepted for execution, accruals for any financial transactions are suspended. The debt is fixed, and after the individual is declared bankrupt, it is written off.
The unconditional disadvantage of such a procedure is that until the date of completion of the proceedings on the case, a person cannot leave the country. He also cannot hold responsible positions for three years. It is impossible to start a new bankruptcy procedure within five years.
The law obliges the citizen to inform new creditors about the previous bankruptcy procedure. For the period of consideration of the case, the arrest of the debtor's property is not excluded.
The court can declare a citizen bankrupt if the amount of obligations exceeds 500 thousand rubles, and the delay in payments is three months or more. The law provides for the possibility of declaring a person bankrupt if he foresees a situation when he cannot pay off the debt.
The completion of the bankruptcy procedure will be deemed to be the decision that the debtor is declared bankrupt. After that, all his debts are written off, and enforcement proceedings against this person are terminated. The arrest is removed from property and accounts, as well as a ban on a person's departure from Russia, if any.
Retroactive force and bankruptcy
If the action of a certain law is capable of extending to those relations that arose before the moment of its entry into force, then they say that this law has a retroactive effect. The general rule for any situation is that the law is not retroactive.
Acts of civil legislation apply only to those relationships that were formed after the law was enacted. This is directly indicated by Article 4 of the Civil Code of the Russian Federation. An exception will be those cases when the text of a law directly indicates that this act is retroactive.
The transitional provisions of the current bankruptcy law do not say anything about the fact that such a law is retroactive. For this reason, this piece of legislation cannot be applied to debts that arose before the entry into force of the law.
Legislators and human rights activists are widely debating the issue of possible amendments to bankruptcy legislation. One such amendment concerns the possibility of giving retroactive effect to the law. The objection from the opponents of such an approach is as follows: by giving the bankruptcy law a retroactive effect, the state will actually deprive the creditors of their property in the legal sense. Taking into account the efforts that the state is making to maintain the banking system in a stable state, experts consider such a step unjustified.
