Debt restructuring procedure

According to the Law of the Republic of Kazakhstan «On Rehabilitation and Bankruptcy» a debtor has the right to decide on the restructuring of their debt in the event of temporary insolvency, provided that there are no ongoing court cases regarding rehabilitation or bankruptcy. The debtor must apply to the court for debt restructuring, accompanied by documents evidencing temporary insolvency.

From the date of the court’s decision to apply the debt restructuring procedure, the debtor is prohibited from engaging in any transactions involving the alienation of assets.

Within two months from the date the court’s decision on the application of the procedure comes into effect, the debtor must conclude an agreement on debt restructuring with all creditors.

The debt restructuring agreement must include provisions regarding the terms of the agreement, the procedure, methods, and timelines for the debtor’s obligations to the creditor(s). The agreement for debt restructuring is valid for a period of no more than three years.

After concluding the debt restructuring agreement with all creditors, the debtor must apply to the court for approval of the debt restructuring agreement.

Upon approval of the debt restructuring agreement, from the date the court’s ruling comes into effect:

-The accrual of penalties (fines, charges) on all types of the debtor’s debt is halted;

-All restrictions imposed by government bodies on the debtor’s accounts are lifted;

-The execution of previously adopted court decisions and arbitration awards is suspended, except for payments to individuals for whom the debtor is liable for harm to life or health, excluding claims for moral damages, the payment deadlines for which arise after the conclusion of the debt restructuring agreement;

-New seizures of the debtor’s property and other restrictions on the disposal of their assets are allowed only for claims aimed at declaring transactions invalid and reclaiming property from illegal possession.