Mechanism of restoration of solvency and bankruptcy of individuals

Since March 3, 2023, the Law of the Republic of Kazakhstan "On Restoration of Solvency and Bankruptcy of citizens of the Republic of Kazakhstan" (hereinafter - the Law) has been in force in the country. The law proposes 3 procedures for resolving issues with debts of individuals: out-of-court bankruptcy, judicial bankruptcy and restoration of solvency. The out-of-court bankruptcy procedure can be applied for debts of less than 1,600 MCI to banks, microfinance organizations and collection agencies (debt of no more than 5.9 million tenge). The application is submitted to the PSC, through the e-government portal (eGov.kz .), as well as through the mobile applications e-Salyq Azamat and eGov Mobile. The procedure lasts for 6 months, after which the obligations of the bankrupt are subject to termination. Since the date of the Law's entry into force, 13,384 citizens have been declared bankrupt in the amount of 29.6 billion, and a procedure is being carried out against 6,612 citizens. Judicial bankruptcy, citizens can apply if the debt to banks, microfinance organizations and collection agencies exceeds 1600 MCI or for other debts, regardless of the amount, as well as if there is property. The procedure for restoring solvency provides for the possibility of obtaining installments in court to pay debts (up to 5 years). The advantage of this procedure is that after it a person does not acquire the status of "bankrupt", therefore, the consequences provided for a bankrupt do not apply to him. More than 2.6 thousand citizens applied for the application of the judicial bankruptcy procedure and the procedure for restoring solvency. The bankruptcy proceedings are being conducted against 200 debtors. 4 citizens are restoring their ability to pay. As we can see from the information provided, the provisions of the Law have found their target audience. At the same time, law enforcement practice has pointed to the need to simplify procedures. In this regard, amendments to the Law were signed on June 19, 2024, which provide for: 1. review of the grounds for the application of procedures - in order to apply the procedure for restoring solvency, it is not mandatory to have overdue debts and property; - it is possible to apply the procedure of out-of-court bankruptcy for obligations to all organizations that own the rights of claim under bank loan agreements, loan (loan) agreements and micro-credit agreements for individuals, including those deprived of a license, who are at the stage of liquidation, excluded from the relevant register. 2. simplification of the application for out-of-court bankruptcy procedure the debtor is relieved of the obligation to indicate in the application information about the creditor, the amount of the debt and attach any documents to it. 3. clarification of the calculation of the period of non-payment for the application of out-of-court and judicial bankruptcy procedures , payments on debts less than 1 MCI will not be considered repayment, and the period of non-repayment under contracts assigned to the collection agency will be calculated from the date of the last payment until the assignment of the right (claim). 4. changing the settlement period if the period of absence of payments is more than 12 months, no debt settlement is required. These amendments will come into force on August 25, 2024.

Department of State Revenue for the city of Kostanay.