The first pilot case of personal bankruptcy in China: 2.14 million debts only need 32,000 repayments

category:Finance
 The first pilot case of personal bankruptcy in China: 2.14 million debts only need 32,000 repayments


On August 12, 2019, the Pingyang Court decided to file a case for Cais centralized debt liquidation and appointed Wenzhou Chengda Accounting Firm as the administrator. Following the announcement of the declaration of creditorsrights and the announcement of the first creditors meeting issued by the administrator, the Pingyang court held the first creditorsmeeting of Cais debt centralized liquidation on September 24. Cai Mou promised in the way of reading the promise letter of all honest acts that there was no other property except the property that the administrator had ascertained; if there was dishonest acts, he was willing to bear legal consequences, and if it caused losses to creditors, he was liable for compensation according to law. Finally, Cai Mou put forward a one-time settlement plan in 18 months, according to the 1.5% liquidation ratio, that is, more than 32,000 yuan. At the same time, Cai promised that within six years from the date of the completion of the scheme, if the familys annual income exceeds 120,000 yuan, more than 50% of the total will be used to liquidate the debts of all creditors that have not been liquidated.

Four creditors participated in the voting. On the premise of fully understanding the debtors economic situation and confirming the debtors good faith, one of the creditors voted to adopt the above-mentioned liquidation scheme, agreed to reserve the necessary living expenses and medical expenses for the debtor, voluntarily waived the right of recourse to its remaining debts, and agreed that the debtor could resume after three years from the date of the completion of the liquidation scheme. Its personal credit. At the same time, it is clear that within six years from the date of the completion of the centralized liquidation of individual debts, if it is found that the debtor has not declared significant property, or that there is fraud, malicious reduction of the debtors property or other acts of debt evasion, the creditor may request the restoration of liquidation in accordance with the original debt amount.

On September 27, the Pingyang court issued a restraining order on Cai Mous behavior and ended the execution of Cai Mou in the case involved in this liquidation. Eventually, the case was settled.

On July 16 this year, 13 departments, including the National Development and Reform Commission, jointly issued the Reform Plan for Quickening and Improving the Exit System of Market Subjects, and stepwise promoted the establishment of the bankruptcy system for natural persons. Among them, Wenzhou City carried out the centralized liquidation of personal debt for the pilot of the personal bankruptcy system. On September 11, Wenzhou Intermediate Court Joint Municipal Finance Office notified about the pilot work of centralized liquidation of personal debt, and published the Opinions on the Implementation of centralized liquidation of personal debt of Wenzhou Intermediate Court.

At present, there is no personal bankruptcy system in China. With the development of personal consumer finance, there are voices calling on individuals to establish personal bankruptcy system. In terms of personal credit, the deposit real-name system has been established in China, and the personal credit report will soon enter version 2.0.

Referring to foreign cases, the bankruptcy laws of the United States, Britain, Australia, Germany, France, Japan and other countries have established the individual bankruptcy legal system. However, supporters believe that the individual bankruptcy system, in response to such situations as the earthquake, can lead to a serious decline in the solvency of individuals, individuals can not apply for bankruptcy and debt relief like enterprises, is not conducive to personal rearrangement and planning for future life. Opponents argue that if permission exemption is abused in personal bankruptcy, it may induce malicious debt evasion, moral hazard and impair the fair repayment of bankruptcy proceedings.

In the pilot project of centralized liquidation of personal debts in Wenzhou, the practice is to enter the executed person of centralized liquidation of personal debts, provided that the assets are insufficient to pay off all debts or obviously lack liquidity, and meet one of the following conditions: (1) a legal person of an enterprise has entered bankruptcy proceedings or has gone bankrupt, and is a natural person responsible for guaranteeing the legal person of the enterprise; (2) because of the company The natural person whose legal personality is denied bears the responsibility of liquidation; (3) the natural person operator who is liable for liquidation of the debts of the non-legal person organization; (4) the natural person who is unable to repay the debts due to living difficulties; (5) other natural persons who voluntarily submit repayment arrangements and obtain the consent of all the applicants for execution.

Source: Responsible Editor of Economic Report in the 21st Century: Chen Hequn_NB12679