China News Client Beijing, June 3 (Reporter Li Jinlei) The personal bankruptcy system is really coming!
On June 2, the General Office of the Standing Committee of the Shenzhen Municipal People's Congress issued the "Shenzhen Special Economic Zone Personal Bankruptcy Regulations (Consultation Draft)" and publicly solicited opinions.
This is the first time that personal bankruptcy legislation is in China. So, what is a personal bankruptcy system? Why should it be established? Who can apply? Do you not have to repay your money after bankruptcy? Will this be a tool for Lao Lai to evade debts and become a carnival for Lao Lai?
Bank card information map. China News Agency reporter Tuobo
What is personal bankruptcy?
In July 2019, 13 departments such as the National Development and Reform Commission announced the "Accelerating the Improvement of the Reform Scheme for the Exit of Market Subjects," and proposed to establish a personal bankruptcy system.
The so-called personal bankruptcy system, in layman's terms, refers to the process of applying for bankruptcy to the court and paying off the debts in accordance with legal procedures when the debtor has no ability to repay the money on time and cannot reconcile with the creditor.
Chen Xiahong, a researcher at the Bankruptcy Law and Corporate Restructuring Research Center of China University of Political Science and Law, told reporters at Chinanews that the personal bankruptcy system is essentially a relief and relief system for debtors, and rescues "honest but unfortunate" debtors from the mud of debts. Give them a chance to rise again, instead of letting them jump upstairs and commit suicide because of their entrepreneurial failure.
Why should it be established?
The main purpose is to give "honest but unfortunate" people a chance to be reborn.
According to statistics, as of the end of January 2020, there were 3.298 million commercial entities registered in Shenzhen, including 1.236 million individual industrial and commercial households, accounting for 37.5%. In addition, there are a large number of self-employed commercial entities in the form of micro-commerce, e-commerce, and freelancers.
The Standing Committee of the Shenzhen Municipal People's Congress said in a related statement that due to the long-term lack of personal bankruptcy system, once this part of the commercial subject encounters market risk, it needs to bear unlimited debt liability in the name of the individual, cannot obtain the same bankruptcy protection as the enterprise, and cannot achieve market-based Exit and regenerate. Therefore, establishing and perfecting the personal bankruptcy system to provide honest and unfortunate market entities with follow-up protection against the debt crisis can relieve individual entrepreneurs from worries and promote innovation and entrepreneurship.
The Standing Committee of the Shenzhen Municipal People's Congress said that the centralized liquidation of personal debts through the bankruptcy system can not only prevent the occurrence of vicious incidents infringing personal rights and interests in debt recovery, but also effectively reduce the cost of realizing a single claim. At the same time, bankruptcy protection can also prevent excessively indebted individual debtors from falling into a desperate situation and reduce the social costs of disease, crime and unemployment.
Data map: People withdraw money from ATMs. China News reporter Li Jinlei
Who can apply?
According to the "Draft for Consultation", natural persons who have lived in the Shenzhen Special Economic Zone and have participated in the Shenzhen Social Insurance for three consecutive years, due to production, operation and living consumption, have insufficient assets to pay off all debts or obviously lack the ability to pay. Bankruptcy liquidation or settlement.
Note that if the illegal operation or excessive consumption leads to the failure to pay off the debt, this Regulation cannot be applied.
In addition, creditors can also apply for debtor bankruptcy. According to the draft for comments, creditors who individually or jointly hold debts over 500,000 yuan due to the debtor may apply to the people's court for bankruptcy liquidation of the debtor.
Is there no need to pay back the money?
"It's not that you don't have to repay the money, but there is a partial exemption with a prerequisite." Chen Xiahong said that the debt of the natural debtor is not directly exempted because of the declaration of bankruptcy. Only when the legal conditions are met and after a certain period of supervision, the debt talent is exempted. . During the supervision period, the debtor's life is greatly restricted and there can be no high consumption.
Li Shuguang, director of the Research Center for Bankruptcy Law and Corporate Restructuring of China University of Political Science and Law, said that debt forgiveness is conditional. Except for your basic living expenses and basic living security, all money should belong to creditors, nor does it mean that you will be exempted immediately. It takes seven years for foreign countries like the United States and five years for Hong Kong. During this period, you have to keep paying off debts.
A relatively famous case is that Hong Kong artist Zhong Zhentao, the singer of the song "As long as you live better than me", filed for personal bankruptcy in 2002. During the bankruptcy period, all income earned by Zhong Zhentao must be turned over. After the Bankruptcy Administration provides life assistance in accordance with the needs of his life, the rest of the income is used for debt repayment. It was not until October 2006 that the court approved Zhong Zhentao's release from bankruptcy.
In 2019, the country's first personal bankruptcy case was settled in Wenzhou. In this case, Cai Mou, a shareholder of a bankrupt enterprise with a debt of more than 2.14 million yuan, eventually only needed to repay more than 32,000 yuan, and paid off in one lump sum within 18 months. Within 6 years from the completion of the performance, if his family's annual income exceeds 120,000 yuan, 50% of the excess will be used for repayment.
RMB data map. China News reporter Li Jinlei
Specifically to Shenzhen, in accordance with the Draft for Consultation, the period of exemption inspection is three years. When the period of exemption inspection expires, the bankrupt may apply to the people's court to cancel the remaining debt.
After entering bankruptcy proceedings, the debtor will be restricted in consumption behavior and restricted professional qualifications.
First, restrict consumption, including not being able to fly in business class, first class, soft sleeper, second-class or higher cabins of the train, G-head high-speed EMU passenger trains and other EMU trains with first-class seats or more; Hotels, nightclubs, golf courses and other places for consumption; can not buy real estate, motor vehicles; can not travel; can not be used for children to attend high-charge private schools, and so on.
The second is to restrict professional qualifications. The debtor shall not hold the positions of directors, supervisors and senior managers of listed companies, non-listed public companies and financial institutions, or engage in occupations prohibited by laws and administrative regulations.
Will it become Lao Lai's debt evasion tool?
The reporter found that the public is generally worried about a question, that is, will the personal bankruptcy system become a carnival for the Lao Lai and become a debt evasion tool for some people to "fake bankruptcy, true debt evasion"?
Data figure: Bank teller is working. Photo by Ai Qinglong
The Standing Committee of the Shenzhen Municipal People's Congress said that for debtors who maliciously evade debts or commit bankruptcy fraud, not only can they evade debts through bankruptcy, but they must also be prevented and punished by legal means.
The "Draft for Comments" adopts a series of system designs to avoid malicious debt evasion. Debtors with bankruptcy fraud are not allowed to apply the bankruptcy exemption rules, and they must also be held accountable. It also stipulates the system of non-forgivable debts, non-forgivable behaviors, extension of the exemption inspection period, and cancellation of forgiveness to achieve the purpose of preventing and punishing bankruptcy fraud.
At the same time, the conditions for debt cancellation are strictly restricted, that is, only when the debtor declares the property faithfully, follows the principle of good faith, actively transfers the property and cooperates with the disposal, fulfills the due obligations, and abides by the relevant behavior restriction decision, can the remaining debt be exempted according to law.
In addition, the "Exposure Draft" also stipulates a retrospective system, that is, if a creditor or other interested party finds that the bankrupt obtains the relief of the remaining debt through fraudulent means, it may apply to the people's court to revoke the exemption ruling.
Experts suggest that we must be alert to the possibility of escaping debt through the personal bankruptcy system, and we must comprehensively prevent debtors from abusing the personal bankruptcy system.
What do you think of the personal bankruptcy system? (Finish)