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The law takes effect 60 days after its official publication. This means that citizens with debts will be able to file an application for bankruptcy in March 2023.
The law provides for 3 types of procedures: out-of-court bankruptcy, judicial bankruptcy and restoration of solvency.
All three procedures are initiated only by the debtor, that is, the creditor hs no right to file for bankruptcy of the debtor.
The first procedure: Out-of-court bankruptcy can be applied exclusively for debts to banks, MFOs and collection agencies.
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Out-of-court bankruptcy, citizens will be able to apply under the following conditions:
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if debt to banks, microfinance organizations and collectors does not exceed 5.5 million tenge (1600 MCI);
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if no debt repayment to banks, microfinance organizations, collectors has been made within 12 consecutive months as of the date of filing the application;
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there is no registered property, including property in common ownership;
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actions were made to manage overdue debts with the bank;
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bankruptcy has not been applied for 7 years.
In addition, the legislation provides special conditions for:
- TSA recipients within 6 months;
- citizens whose debt has not been repaid for more than five years.
Out-of-court bankruptcy will begin on «the e-government» web portal. Then, an automatic reconciliation will be carried out with the data of interested state and other bodies for compliance of the debtor with the input criteria through the information system.
For debts over 5.5 million tenge and for other types of debts, citizens will be able to apply for judicial bankruptcy.
The purpose of judicial bankruptcy is satisfying requirements of the creditors at the expense of property mass of the bankrupt.
If primary residence is the subject of a pledge, then the creditor will have the right to withdraw it during the bankruptcy proceedings.
If the primary residence is not the subject of a pledge, creditors will not be able to attack it.
The outstanding amount is subject to write-off, in the absence debtor's bad faith (concealment of property or information about it, provision of false information, etc.).
The procedure of judicial bankruptcy is carried out by financial managers, which may include:
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Administrators carrying out the bankruptcy procedure of legal entities and sole proprietors;
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Professional accountants;
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Legal consultants;
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Auditors.
Taking into account that not all debtors will be able to pay for financial management services, the legislation provides for payment at the expense of the state to socially vulnerable groups of the population without property.
The third procedure – restoration of solvency, provides for the possibility of obtaining installments in court to pay debts (up to 5 years), if there is a stable income.
The recovery plan is to be developed together with the financial manager and approved in court.
The advantage of this procedure is that after it a person does not gain the status of "bankrupt", therefore, the consequences provided for a bankrupt do not apply to him or her.
Consequences after declaring a citizen as a bankrupt:
1) a ban on obtaining loans and credits for 5 years (except for obtaining micro-loans from pawnshops);
2) repeated bankruptcy is possible only after 7 years;
3) the financial condition of the bankrupt will be monitored for 3 years after the bankruptcy.
Debts on alimony, compensation for harm to the life or health of another person, as well as compensation for damage caused in criminal offenses are not subject to write-off.
