Zhejiang Higher People's Court issued "Guidelines" to help "honest and unfortunate" debtors get rid of debt shackles
The comprehensive promotion of the personal bankruptcy system is worth looking forward to
● Since the end of 2018, the exploration of the personal bankruptcy system represented by Wenzhou, Taizhou, and Lishui Suichang has been gradually carried out, breaking the ice in the handling of centralized liquidation cases of personal debts with substantial personal bankruptcy functions
● Zhejiang is a large private economic province and a pioneer province of reform and opening up. The exploratory experience of Zhejiang courts in the personal bankruptcy system provides important practical materials and Zhejiang samples for subsequent institutional legislation
● The personal bankruptcy system is the basic rule for changing the concept and culture of the whole society. The technical problems of the establishment and implementation have been overcome, mainly the follow-up problem of the system rules. The key is to have matching rules and a matching team
□ Our reporter Chen Dongsheng
□ Correspondent Wang Baoqi
Speeding up the exploration of the personal bankruptcy system.
On December 3, 2020, the Zhejiang Higher People’s Court held a press conference and issued the "Guidelines for the Centralized Liquidation of Personal Debts (Personal Bankruptcy) in Zhejiang Courts (Trial)" (hereinafter referred to as the "Guidelines"), which means that Zhejiang has officially explored Personal bankruptcy system.
Ju Haiting, President of the Fifth Civil Division of the Higher People’s Court of Zhejiang Province, said in an interview with a reporter from the Rule of Law Daily that the Zhejiang Higher People’s Court issued the "Guidelines" with the aim of treating "honest and unfortunate" debtors from "dishonest" debtors. Distinguish, give the former a relatively loose system, and enforce enforcement on the latter.
"For honest debtors, the centralized personal debt clearing system provides four incentives: one is that as long as the debtor declares the property truthfully, it can be exempt from blacklisting, detention, fines and other enforcement measures; the second is to resolve all claims and debts at once Disputes; the third is to enable the debtor to live a normal life; the fourth is that the government provides fees for the managers of individual centralized debt liquidation to save costs for the debtor. For creditors, there are at least three guarantees: First, find out the property base and introduce accountants Professional managers such as firms can investigate the debtor’s property through multiple channels to find out the bottom of the property as much as possible; second, the realization of certainty of creditor’s rights and the centralized liquidation of personal debts can clarify how much debt the debtor owes, and creditors can know what percentage they can get The third is to increase the degree of trust. The introduction of a third party is a restriction on the court and is conducive to obtaining creditors’ trust in the results of the investigation.” Ju Haiting said.
Combine actual exploration and innovation
Accumulate experience through case handling
At present, my country has not yet enacted a personal bankruptcy law.
In reality, some "honest and unfortunate" debtors are in trouble and lose their ability to refinance and re-enterprise, which has curbed the vitality of social investment to a certain extent.
On February 27, 2019, the Supreme People's Court first proposed to study and promote the establishment of a personal bankruptcy system in the "Opinions on Deepening the Comprehensive Complementary Reform of the People's Court Judicial System".
In fact, since the end of 2018, the exploration of the personal bankruptcy system represented by Wenzhou, Taizhou, and Lishui Suichang has been gradually carried out, breaking the ice in the handling of centralized settlement of personal debts with the substantive function of personal bankruptcy.
On October 9, 2019, the Wenzhou Intermediate People's Court of Zhejiang Province and the People's Court of Pingyang County held a press briefing to inform the Pingyang Court of the case of the centralized liquidation of debts of a certain bankrupt company in Wenzhou, which has been settled by Cai.
The debtor, Cai, is a shareholder of a bankrupt company in Wenzhou, and it is determined by the effective judgment that he should bear joint responsibility for the settlement of more than 2.14 million yuan of debts of the bankrupt company.
After investigation, Cai only holds 1% of the shares in a machinery company in Ruian City where he is currently employed (the actual capital contribution is 5,800 yuan), and there is also a 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 suffered from high blood pressure and kidney disease for a long time, and the medical expenses are huge, and his child is studying at a certain university. The family cannot make ends meet for a long time and is indeed unable to pay off the huge debt.
On August 12, 2019, the Pingyang Court ruled to accept the case of centralized liquidation of a certain person's debt by Cai, and appointed Wenzhou Chengda Certified Public Accountants as the administrator.
After the administrator released the announcement of claims declaration and the announcement of the first creditors meeting, the Binh Duong Court presided over the first creditors meeting for the centralized liquidation of Cai's debts on September 24 of that year.
Cai solemnly promised by reading the "No Dishonest Act Commitment" that there will be no other property except the property that the manager has ascertained; if there is dishonest behavior, he is willing to bear legal consequences, and if he causes losses to creditors, he shall bear it in accordance with the law Liability.
In the end, Cai proposed a one-time settlement within 18 months at a settlement ratio of 1.5%, which is more than 32,000 yuan.
At the same time, Cai promised that within six years from the date of the completion of the plan, if his family's annual income exceeds 120,000 yuan, 50% of the excess will be used to pay off all creditors' unpaid debts.
A total of 4 creditors participated in the voting. On the premise of fully understanding the debtor’s economic situation and confirming the debtor’s integrity, one of the creditors passed the above-mentioned liquidation plan after voting, agreed to reserve the necessary living and medical expenses for the debtor, and voluntarily waived the remaining debts. And agree that the debtor can restore his personal credit after 3 years from the date of completion of the liquidation plan.
At the same time, it is clarified that within six years from the date when the centralized liquidation plan for personal debts is fully implemented, if the debtor is found to have failed to declare major assets, or there is fraud, malicious reduction of the debtor’s property, or other debt evasion, the creditor may request the restoration of the original debt To pay off.
On September 27, 2019, the Binh Duong Court issued a restraining order against Cai and terminated the execution of Cai in the case involved in this liquidation.
In the end, the case was successfully concluded.
Chen Weiguo, a member of the Wenzhou Intermediate Court’s Party Group and Director of the Executive Bureau, commented on the case and pointed out that the Pingyang Court’s case of centralized liquidation of certain people’s debts was the first case in the country after the Supreme Law proposed to study and promote the establishment of a “personal bankruptcy system”. Personal debt liquidation cases with substantial functions of bankruptcy and equivalent procedures.
As of September 30, 2020, Zhejiang Province has accepted a total of 237 cases of centralized liquidation of personal debts, including 137 in Taizhou, 56 in Wenzhou, and 41 in Lishui; a total of 147 cases of centralized liquidation of personal debts have been handled, including 80 in Taizhou and Wenzhou 33 pieces each in Lishui and 1 piece in Shaoxing.
In terms of debt and settlement, the total amount of debts involved in the centralized liquidation of personal debts in Zhejiang Province was 202.7 million yuan; in terms of the number of creditors, there were 685 creditors involved in the centralized liquidation of personal debts in Zhejiang Province; in terms of enforcement cases, the centralized liquidation of personal debts in Zhejiang Province A total of 712 enforcement cases were involved, involving an amount of 248.2 million yuan in enforcement.
Establish an effective distinction mechanism
To save the good faith debtor
On December 3, 2020, the Higher People’s Court of Zhejiang Province issued the “Guidelines”, proposing the three basic principles of compliance with laws and regulations, encouragement of exploration, and linkage between government and court, and actively explored through conditional debt relief, honest property declaration, and reasonable determination of “necessities of life” "In order to achieve the institutional purpose of exempting property in the bankruptcy system, etc., fully explore the institutional factors of personal bankruptcy in the centralized liquidation of personal debts.
It is understood that the “Guidelines” consist of 61 articles, divided into 11 parts, aiming to establish an effective distinguishing mechanism, through measures such as debtor declaration, acceptance of creditor’s inquiries, investigation and verification by the people’s court ex officio, and administrator’s investigation and verification. The debtors who have the ability to perform but refuse to perform the obligation to determine the effective legal documents ("Laolai") are distinguished from the "honest and unfortunate" debtors. On the basis of the enforcement of the former, the latter is given a relatively loose system.
The debtor’s "good faith" is the prerequisite basis for the operation of the system. If the debtor has malicious evasion and other dishonest behaviors, the centralized clean-up procedure will not be initiated or terminated in time.
In order to encourage and guide relevant interested parties to carry out the centralized liquidation of personal debts, the "Guidelines" clarify that for honest debtors who truthfully declare their personal property, the people's courts can exempt them from being included in the list of untrustworthy persons subject to enforcement, detention, fines, and other enforcement measures. In accordance with the deliberation and opinions of the creditors meeting, it is determined in accordance with the law to retain the debtor’s necessities and provide appropriate subsidies for related expenses.
Regarding creditors, the People’s Court will introduce more methods of investigating and verifying the debtor’s property, such as manager resources and bankruptcy special funds, etc., and ensure that the debtor honestly participates and actively cooperates, conducts a more comprehensive and thorough investigation and verification of the debtor’s property status, and safeguards the legitimate interests of the creditor .
In a set of procedures established in the Guidelines, the personal bankruptcy system is fully integrated with the enforcement system, and the administrator system in the bankruptcy procedure is introduced into the enforcement procedure, or the property declaration system in the enforcement procedure is returned To the standard of the bankruptcy system.
Through the implementation of the centralized liquidation of personal debts, the reverse boost implementation system returns to the "enforcement" standard, and further clarifies the object difference between the two systems: the parties who "have the ability to perform but refuse to perform the obligations determined by the effective legal document" take enforcement measures ; For those who are truly "honest" but "incapable of performance", they can be collectively executed through the centralized liquidation of personal debts, freeing them from the chain of debts.
The Guidelines also explore and innovate to the greatest extent based on actual conditions, such as the establishment of double voting rules, the conclusion of the creditors meeting’s deliberation of the scope of necessities (exempt property) as an important basis for the corresponding decisions of the people’s court, and guiding creditors to make conditional debt relief Commitment etc.
"The bankruptcy legal system is a basic system of the socialist market economy legal system and an infrastructure of the market economy system." Xu Jianxin, vice president of the Zhejiang Higher People's Court, said that Zhejiang is a large private economic province and a pioneer in reform and opening up. In provinces, Zhejiang courts’ exploratory experience in the personal bankruptcy system provides important practical materials and Zhejiang samples for subsequent institutional legislation.
The system has far-reaching significance
Follow up with supporting rules in time
Liu Junhai, director of the Institute of Commercial Law of Renmin University of China, believes that the Guidelines have borrowed from Shenzhen’s personal bankruptcy regulations and made some breakthroughs in the centralized liquidation mechanism of personal debt. These are all useful explorations for the establishment of a personal bankruptcy system in the future.
According to Lu Lin, director of the Bankruptcy and Liquidation Legal Committee of the Guangdong Lawyers Association, the centralized liquidation of personal debts is similar to the reconciliation procedure in the personal bankruptcy system. This mechanism is obviously developing in the direction of a formal personal bankruptcy system.
Previously, Shenzhen’s personal bankruptcy regulations were local regulations and were legislated by the local people’s congress, and the “Guidelines” issued by the Zhejiang Provincial Higher People’s Court served as judicial guidelines for the local courts.
"The centralized liquidation of personal debt is not a transitional mechanism. In the future, after the establishment of a national-level personal bankruptcy system, a personal debt liquidation mechanism will still be needed. The bankruptcy liquidation procedure is time-consuming and labor-intensive, and it involves personal bankruptcy issues. Various methods should be adopted. Simultaneously, multi-pronged." Lu Lin said.
Wang Feimin, director of the Bank Recovery and Disposal Rule of Law Research Center of North China University of Technology and director of the Financial Technology and Information Security Research Institute, also pointed out that the "Guidelines" were issued at the right time. This is based on the previous three pilot projects in Taizhou, Wenzhou and Lishui. After summarizing the experience, it will then promote a personal bankruptcy system in which personal debts are cleaned up in the whole province.
The personal bankruptcy system is to tolerate failure while encouraging entrepreneurship and innovation. If it can be implemented, it will play a major role in promoting the development of the private economy and personal entrepreneurship and innovation.
Taking the financial industry as an example, Wang Feimin said that the personal bankruptcy system will prompt the financial industry to return to rationality.
In order to make huge profits, some private lending institutions will issue loans with high interest rates but also high risks.
After the implementation of the personal bankruptcy system, financial institutions will return to rationality, and mainly use big data-driven credit ratings to find creditworthy individuals in the society as target customers, instead of letting borrowers provide real estate or other people’s guarantees as in the past. The financial industry will develop in a healthy and rational manner.
At the same time, the financial industry can further promote the honest and trustworthy people in society to obtain convenient, efficient, and low-cost financing, so that those individuals who have the ability to perform but refuse to perform the payment obligations determined by the effective legal documents cannot obtain financing or more money. Obtaining financing at a high cost will further strengthen the personal bankruptcy system and the enforcement system of the civil procedure law, so that the development of the financial industry and the implementation of the law will form a positive interaction.
It is worth noting that after the "bankruptcy protection" of creditworthy debtors, how to further curb malicious evasion of debts?
Shi Yifeng, deputy director of the Bankruptcy Law Research Center of Zhejiang University, believes that the fight against malicious evasion of debts needs to be carried out from both pros and cons: on the one hand, establish a property registration and inquiry system, and establish a credit evaluation system on this basis to urge debtors to perform debts in a timely manner On the other hand, by further improving the personal debt liquidation and personal bankruptcy supporting legal systems, debtors have the opportunity to start again.
So, how far is it from the implementation of the personal bankruptcy system across the country?
Li Shuguang, drafter of the Corporate Bankruptcy Law and director of the Bankruptcy Law and Corporate Restructuring Research Center of China University of Political Science and Law, said that the personal bankruptcy system is a basic rule that changes the concept and culture of the entire society. The technical problems currently established and implemented have been overcome, mainly due to the system rules. To follow up the problem, the key is to have matching rules and matching teams.
Zhang Jijun, a partner of Zhongwen Law Firm and director of the corporate reorganization and liquidation business department, believes that through the practice of Zhejiang’s personal bankruptcy system and summing up experience, we believe that a nationally applicable personal bankruptcy system can be formulated in the shortest time, so that the Objective factors such as management have caused the "honest and unfortunate" debtors with poor management to get rid of the debt yoke, encourage entrepreneurs to rebirth, and promote economic development.