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» Individual and corporate bankruptcy

Individual and corporate bankruptcy

At the time of crisis (economic depression), financial collapses of business units and regular citizens are inevitable. It’s an open secret that most of people in Russia live on credit. The deficit of proprietary funds, low income and numerous risks on the side of entrepreneurs along with underdeveloped market relations often lead to individual and corporate indigence. It’s almost impossible to get off the debt bondage without any help because banks are much stronger in both the economic and the legal aspects and it’s also an open secret that banks often have strong administrative support in resolution of disputes both on the stage of court proceedings and execution processes.

The one and only way off the situation is bankruptcy. It will be quite challenging to carry out the bankruptcy procedure in a proper way without an assistance of a qualified specialist. This procedure is so complicated and multifarious that sometimes lawyers refuse to deal with it. The Moscow Bar Association “MAGNETAR” has an obvious advantage over other legal organizations. We have been providing various services within bankruptcy proceedings for many years. Our company was one of first to implement bankruptcy regulations in the legal practice.

Everybody heard about fundamental changes in bankruptcy regulations carried out in 2015. The bankruptcy law now (after another amendment) enables individuals to be found insolvent or in other words bankrupted. The first personal bankruptcy proceedings were initiated in October 2015 and the MBA “MAGNETAR” as a path-breaker of its region in various branches of the legal activity, for sure, made its contribution in generating a new legal practice.

The self-initiated bankruptcy procedure (concerning individuals and legal entities) is available only by filing of a corresponding application. In other cases, it is referred to forced bankruptcy, including initiation of the procedure by government authorities (Federal Tax Service Inspectorate). However, timely filing of an application by a citizen or representative of a company for arbitration doesn't guarantee prompt declaration of bankruptcy. There are plenty of nuances, which can be clearly seen just by a qualified lawyer proficient in such matters.

First of all, a large list of conductive documents should be attached to the application, to prove the circumstances referred to in. Large indebtedness and the real impossibility to settle it through the income or by disposal of property or assets should be proven at the time of submission of the application. In order to avoid incidents, it's better to turn for help to a professional. The lawyers of MBA “MAGNETAR” may provide you with both the reference information upon documentations that have to be attached to the application at the initiation of bankruptcy procedure and the service of all the necessary documents collection (we represent your interests even prior to judicial recourse.

Secondly, the simulation of circumstances resulted in bankruptcy may backfire against you. Arbitrations are enforced to reveal such simulations (imitations) of insolvency for mercenary purposes. Therefore, it's essential to perform a thorough analysis of all the transactions, financial calculations of a business entity or an individual before submission of the application because premeditated bankruptcy is punishable by law (Articles 196 and 197 of the Criminal Code of the Russian Federation). What is more, the possibility to prosecute individuals (including personal entrepreneurs) under these articles was thoughtfully included in the Criminal Code back in 2014. That’s why such flirtations with law enforcement authorities, purposive or accidental, may end up in disaster. The debt remission, so long-hoped for, won’t happen, but a huge penalty fee or a real term along with punitive sanctions may embitter the life.

Thirdly, the insolvency proceedings (complete or incomplete insolvency) include many additional procedures and assignment of executives responsible for them. One of the executives is an insolvency officer – a remedial party in a certain stage of bankruptcy.
The federal bankruptcy law specifies all the categories of insolvency officers that may be appointed subject to the legal form of a bankrupt and the punitive measures applicable to him. There are five basic types of insolvency officers:
  • temporary;
  • external;
  • administrative;
  • bankruptcy manager;
  • financial.

The latter particularly takes part in private bankruptcy proceedings and was legislatively brought in as an executive party after another amendment to bankruptcy laws. Other ones are applicable only for corporate bankruptcy proceedings.

Practical experience in arbitral proceedings and possibility to involve a wide range of specialists let the MBA “MAGNETAR” to provide complex services within bankruptcy proceedings, including selection of candidates for insolvency officers.

The fourth, practically applicable individual bankruptcy procedure dated October 1, 2015 is still the way too new for Russian executors of law, that’s why arbitration courts have to work with incomplete basic data and to sculpture legal cases with a clean slate at their own risk. In the near future, we will be facing a huge number of conventional, carbon-copied judicial acts upon bankruptcy proceedings. That’s why the challenge of qualified lawyers and solicitors is to shut out identical acts with no individual approach to each specific case as required by law. The MBA «MAGNETAR» always enforces the law.

We defend interests of our clients in any legal situation. The gratitude and satisfaction of our clients is the best gift for us as for the instrument of formation of civilized legal services market!