The first personal bankruptcy in the country

The personal bankruptcy system began to break the ice.

On the morning of October 9, the Wenzhou Intermediate People’s Court of Zhejiang Province and the Pingyang County People’s Court held a press briefing to inform the nation’s first case of personal debt settlement with personal bankruptcy functions and equivalent procedures.

In this case, the debtor Cai is a shareholder of a bankrupt enterprise in Wenzhou, and it is determined by the effective judgment document that it should be jointly and severally liable for the debt of the bankrupt enterprise of 2.14 million yuan. After investigation, Cai only held a 1% stake in the Ruizhou City Machinery Co., Ltd. (the actual capital contribution of 5,800 yuan), and another scrapped motorcycle and sporadic deposits. In addition, Cai’s monthly income from the company is about 4,000 yuan, and his spouse Hu’s monthly income is about 4,000 yuan. Cai has long-term suffering from high blood pressure and kidney disease, medical expenses are huge, and his children are studying at a university. The family has long been unable to make ends meet and is unable to pay off huge debts.

On August 12, 2019, the Pingyang court ruled that Wenzhou Chengda Certified Public Accountants Co., Ltd. was appointed as the administrator after the case was filed. After the administrator announced the announcement of the creditor’s rights and the announcement of the first creditors’ meeting, the Pingyang court presided over the meeting of the first creditors of Cai’s debt settlement on September 24. Cai Mou promised to read the “Promise of No Faithfulness”, except for the property situation that the manager has identified, and no other property; if there is dishonest behavior, he is willing to bear the legal consequences, and if the creditor causes losses, he will be compensated according to law. responsibility. In the end, Cai Mou proposed a one-time liquidation plan within 18 months at a settlement rate of 1.5%, which is more than 32,000 yuan. At the same time, Cai promised that if the annual income of the family exceeds 120,000 yuan within six years from the date of completion of the program, 50% of the excess will be used to pay off all outstanding debts of the creditors.

A total of 4 creditors participated in the voting. The creditor, after fully understanding the economic status of the debtor and confirming the integrity of the debtor, voted through the above-mentioned liquidation plan, agreed to retain the necessary living expenses and medical expenses for the debtor, and voluntarily renounced its remaining debt. The right of recovery, and agree that the debtor can resume his personal credit after three years from the date of completion of the liquidation plan. At the same time, it is clear that the creditor may request to resume the original debt amount if it is found that the debtor has not declared the major property within six years from the date of completion of the personal debt centralized cleaning plan, or if there is fraudulent or malicious reduction of the debtor’s property or other evasion of the debt. Make a settlement.

On September 27th, the Pingyang court issued a restraining order against Cai and ended the execution of Cai in the case involved in this cleanup. In the end, the case was settled.

On July 16 this year, 13 departments including the National Development and Reform Commission jointly issued the “Promoting the Improvement of the Market Main Body Exit System Reform Plan” and stepped up the establishment of the natural person bankruptcy system. Among them, the “concentration of personal debts” carried out by Wenzhou City is a pilot of the individual bankruptcy system. On September 11, the Wenzhou Intermediate People’s Court and the Municipal Financial Office reported on the pilot work on the centralized clean-up of personal debts, and announced the Wenzhou Intermediate People’s Court’s “Opinions on the Centralized Clean-up of Individual Debts.”

There is no personal bankruptcy system in China. With the development of personal consumption finance, there is a voice in the industry calling for individuals to establish a personal bankruptcy system. In terms of personal credit, the domestic real-name deposit system has been established, and the personal credit report is about to enter version 2.0.

With reference to overseas cases, the bankruptcy law of the United States, the United Kingdom, Australia, Germany, France, Japan and other countries have established a personal bankruptcy legal system. However, proponents believe that the personal bankruptcy system can seriously reduce the solvency of individuals in response to situations such as earthquakes. Individuals cannot apply for bankruptcy exemption debts like enterprises, which is not conducive to personal re-arrangement and planning for future life. Opponents argue that in the case of personal bankruptcy, if the license exemption is abused, it may induce malicious escape of the debt, induce moral hazard, and damage the fairness of the bankruptcy proceedings.

In Wenzhou’s personal debt concentration clean-up pilot, the practice is to enter the enforcer of the personal debt concentration clean-up procedure, provided that the assets are insufficient to pay off all debts or the apparent lack of liquidity, and meet one of the following conditions: (1) Corporate legal person a natural person who has entered bankruptcy proceedings or has gone bankrupt, has a guarantee responsibility for the legal person of the enterprise; (2) a natural person who is liable for liquidation because the company’s legal personality is denied; (3) a natural person operator who is responsible for the debts of the unincorporated organization (4) Natural persons who are unable to pay their debts due to difficulties in life; (5) Other natural persons who voluntarily propose repayment arrangements and obtain the consent of all applicants.