Out-of-court bankruptcy

The Law of the Republic of Kazakhstan "On Restoring Solvency and Bankruptcy of Citizens of the Republic of Kazakhstan" provides for 3 types of bankruptcy procedures - out-of-court bankruptcy, judicial bankruptcy and restoring solvency.

All three procedures are initiated only by the debtor, that is, the creditor is not entitled to file for bankruptcy of the debtor.

The first procedure: Out-of-court bankruptcy can be applied only to debts to banks, MFIs and collection agencies.

Citizens will be able to apply out-of-court bankruptcy under the following conditions:

1. debt to banks, microfinance organizations and collectors does not exceed 5.5 million tenge (1600 MCI);

2. if no debt repayment to banks, microfinance organizations, collectors has been made within 12 consecutive months as of the date of filing the application;

3. there is no registered property, including property in common ownership;

4. actions were made to manage overdue debts with the bank;

5. 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.

 Citizens can apply for judicial bankruptcy to debts above 5.5 million tenge and for other types of debts.

The purpose of judicial bankruptcy is maximum satisfaction of creditors' claims at the expense of property mass of the bankrupt.

The third procedure, restoring solvency provides for the possibility of obtaining a court decision to pay debts in installments (up to 5 years), if there is a steady income.

The advantage of this procedure is that after it a person does not acquire the status of “bankrupt”, therefore, the above consequences do not apply to him.

At the moment, 1655 applications for applying the out-of-court bankruptcy procedure were received in East - Kazakhstan region, 227 applications were accepted, 1328 applications were denied, 29 applications are under consideration.