Application of the out-of-court bankruptcy procedure

The bankruptcy procedures can be applied to citizens of the Republic of Kazakhstan who comply with the following conditions:

In case of out-of-court bankruptcy:

1) debt does not exceed KZT 5.5 million (1600 MCI);

2) there was no repayment within 12 months;

3) there is no registered property, including those in joint ownership;

4) a settlement has been made with a bank. 

Also, special conditions are provided for recipients of targeted social assistance who have been obtaining it for 6 months and citizens whose debt has not been repaid for more than 5 years.

Out-of-court bankruptcy can be applied exclusively for debts to banks, microfinance organizations and debt collection agencies.

Judicial bankruptcy can be applied by citizens for debts to financial organizations over 1600 MCI (in 2023: KZT 5 million 520 thousand), for all types of debts to other creditors, as well as by those who cannot apply out-of-court bankruptcy due to availability of property.

At the same time, delay in repayment of loan should be at least 12 months and it is necessary to undergo a settlement procedure with banks.

The law also provides for application of solvency recovery procedure, which allows obtaining installment in court to pay debts (up to 5 years), provided that there is a stable income. The recovery plan is co-developed with a finance manager and approved in court. 

The advantage of this procedure is that after it a person does not acquire a "bankrupt" status, therefore, no consequences provided for bankruptcy apply to such a person. 

Please, note the below consequences that a bankruptcy entails: 

1) restriction on obtaining loans and credits for 5 years;

2) subsequent bankruptcy procedure can only by initiated upon expiry of 7 years;

3) financial condition is to be monitored for 3 years after bankruptcy

Upon compliance with the criteria for application of out-of-court bankruptcy procedure, a citizen needs to apply to a local State Revenue Department through e-Gov portal, e-Salyq Azamat and CSC IS. 

Upon compliance with the criteria for application of judicial bankruptcy, a citizen needs to apply to a court at the place of residence.

You can, if you meet the criteria established for applying to out-of-court bankruptcy, judicial bankruptcy or solvency restoration.

In case of bankruptcy procedure application, consideration of a case on recovery of debt is subject to termination.

Thank you for your question! Your situation is clear. If no debt repayment has been made within 12 months as stipulated by the Law and a settlement has been made with banks regarding the debts, you can apply for bankruptcy. But note that it entails consequences. You won`t be able to get another loan in 5 years and your financial situation will be under control within 3 years .

You can apply in March. At the moment,you need to contact a bank regarding loan repayment. 

Hello! You are right! Such kind of obligations do not cease and court decisions are subject to execution.

No, the Law is only applied to citizens with overdue debts over 12 months.

Considering that a citizen has a stable income and a bailiff deducts 50% of salary for repayment of an existing debt, a partial repayment of debt occurs, that is, there is no fact of non-repayment within 12 months.

Moreover, the debt amount of KZT 45.0 billion is recovered under a court decision for a criminal offense, and therefore, according to the provision of Article 46 of the Law "On Solvency Restoration and Bankruptcy of Citizens of the Republic of Kazakhstan" is not subject to discharge due to bankruptcy.

Bankruptcy cases of individuals are considered by courts under the general rules of civil justice with the features established by Law.

The state fee has not been established for the current year. To date, an issue of introducing amendments to the Tax Code has been considered, including in terms of establishing the amount of state fee for submitting a bankruptcy application to a court.

Bankruptcy applications form individuals will be considered in the courts at the place of residence (civil ones).

Monitoring of financial condition after the bankruptcy procedures completion will be carried out based on data about a debtor (nationwide tax reporting), as well as data from authorized bodies. In case if state registration of property will be revealed, a corresponding notification will be sent to creditors. Ostensibility of transaction will be determined by a court.