The first "bankrupt" in the country entered the exemption inspection period
for a period of three years to repay the debts after deducting the necessary monthly expenses. Through the inspection period, they can apply to the court for exemption of the remaining debts.
The "honest and unfortunate" debtor will be "reborn" under the protection of the law.
On November 9, a document published by the Shenzhen Personal Bankruptcy Information Network showed that the Shenzhen Intermediate People's Court ruled that the debtor Humou was bankrupt on November 8.
It is understood that the "Shenzhen Special Economic Zone Regulations on Personal Bankruptcy" was implemented in March this year, becoming my country's first personal bankruptcy regulations.
Prior to this, the first cases of personal bankruptcy reorganization and settlement procedures have been ruled. Humou case is the first personal bankruptcy liquidation case ruled by the court, and she has also become the country's first "bankrupt" in the legal sense.
First in the country
"Bankrupt" Humou will enter the exemption inspection period
Hu Mou ran Shenzhen Huyan Cultural Development Co., Ltd. from 2014 to 2016. Due to the bankruptcy of Xinyijia Supermarket Co., Ltd. in his shopping mall, Huyan Cultural Development Co., Ltd. had to close, resulting in a debt of more than 4.8 million yuan.
In 2018, Humou sold his only house, actually collected 2.6 million yuan, and insisted on repaying the debt, but he still owes more than 1 million yuan.
Hu said that when something went wrong in 2016, the monthly loan repayment was as high as 40,000 to 50,000 yuan, but he still managed to maintain it.
Last year, Hu's career worsened. "There was no income at all during that time, and all of a sudden there was a state of overdue repayment, which led to today's dilemma."
On June 9 this year, Hu submitted a personal bankruptcy liquidation application to the Shenzhen Intermediate People's Court.
The court found that Hu's property was not enough to pay off all debts and met the conditions for declaring bankruptcy.
On November 8, the Shenzhen Intermediate Court ruled that the debtor Humou was bankrupt.
According to the report, Hu's monthly labor income is about 5,000 yuan, he has no fixed job, has a deposit of less than 1,000 yuan, and owns property worth about 3950 yuan, such as furniture and home appliances, and raises his daughter alone after divorce.
In order to ensure Hu's normal life, the creditors' meeting approved a list of her exempt property, including sofas, coffee tables, and Xiaomi mobile phones.
At the same time, the monthly income after deducting the social insurance premiums that Hu should pay, retains the necessary expenses such as alimony, support, and living expenses.
Excluding the necessary monthly expenses, all of her remaining income is used to repay debts.
Since the day of bankruptcy, Humou will enter a 3-year exemption inspection period.
During the inspection period, Humou should register and declare personal income, expenditure, and property status in the bankruptcy information system of the bankruptcy affairs management department every month. Except for deducting the necessary monthly expenses, all the remaining income is used to repay debts.
After passing the inspection period for exemption, Hu can apply to the people's court for exemption of his unliquidated debts.
Attorney Hu Jun, the bankruptcy administrator of the Humou case, said that the administrator will conduct comprehensive supervision of the property and behavior of Humou during the exemption inspection period in accordance with the provisions of the personal bankruptcy regulations, and will also conduct meetings with creditors on schedule based on the property collection situation. Report and distribute property to all creditors.
After the expiration of the exemption inspection period, the Shenzhen Intermediate People's Court will decide whether to exempt the unliquidated debts and lift the restrictions based on the performance of Hu during the inspection period.
"The exemption period can not only allow the'honest and unfortunate' debtor to be'reborn', but also avoid the appearance of malicious bankruptcy." said Cao Qixuan, president of the Shenzhen Bankruptcy Court.
Personal bankruptcy
There are three types of procedures for liquidation, reorganization and reconciliation
For a long time, our country has only the corporate bankruptcy law, and the personal bankruptcy system has not been established.
In July 2019, the National Development and Reform Commission’s "Accelerating the Improvement of the Reform Plan for the Exit System of Market Entities" clearly stated that it will study the establishment of a personal bankruptcy system and focus on solving the problem of joint liability guaranteed debts for natural persons arising from corporate bankruptcy; it is clear that natural persons shall bear the debt due to guarantees and other reasons. Liabilities related to production and business activities can be reasonably exempted in accordance with the law; gradually promote the establishment of eligible consumer liabilities for natural persons that can be exempted in accordance with the law, and finally establish a comprehensive personal bankruptcy system.
In March 2021, the "Shenzhen Special Economic Zone Personal Bankruptcy Regulations" were implemented, becoming my country's first personal bankruptcy regulations.
The regulations provide a total of three types of procedures for liquidation, reorganization and reconciliation, which are applicable to debtors in different situations.
In the bankruptcy liquidation procedure filed by Humou, the debtor has no property management rights, and can only retain the limited assets needed for basic life and occupation, such as appropriate amounts of cash, clothing, necessary household appliances and stationery books, and other assets such as all real estate and machinery. Motor cars, etc. are taken over by the administrator.
This procedure has the greatest impact on personal credit and business affairs, and the most restrictive behavior.
In the bankruptcy reorganization process, the debtor needs to have predictable income in the future, may realize the preservation of housing or other specific properties, and the debtor can continue to retain business affairs upon authorization.
According to regulations, if more than half of the creditors in the same voting group at the creditors meeting agree to the draft reorganization plan, and the amount of the debt represented by them accounts for more than two-thirds of the total debt of the group, the draft reorganization plan is approved by the group.
The settlement procedure is negotiated by the debtor and the creditor. The court only reviews the normativeness of the settlement process and the legality of the settlement agreement; within the entrusted settlement period, if the debtor and all creditors reach a settlement agreement, they can apply to the people's court for approval of the settlement agreement.
Cao Qixuan said that in the previous reorganization and reconciliation cases, the debtor and the creditor reached an agreement and obtained debt relief, reduction, and forgiveness. In order to encourage them to continue to work hard to repay the debt, the law did not declare them bankrupt.
Therefore, the Houmou case is the first "bankrupt" in the legal sense since the implementation of Shenzhen's "Personal Bankruptcy Regulations".
Industry interpretation
Conducive to release the vitality of the private economy
The "Shenzhen Special Economic Zone Personal Bankruptcy Regulations" is my country's first personal bankruptcy regulations. The legal profession believes that its implementation is conducive to the restoration of individuals trapped in debt to be a vigorous member of the society and create more wealth for the society.
Zhao Baodong, a practicing lawyer at Guangdong Shengtang Law Firm and an expert on civil administrative cases at the Supreme People’s Procuratorate, said that the "Shenzhen Special Economic Zone Regulations on Personal Bankruptcy" is conducive to releasing the vitality of the private economy.
On the one hand, business operations themselves are full of risks. The "Personal Bankruptcy Regulations" can protect individuals who operate in good faith and legally, and also provide institutional guarantees to other individual business entities.
On the other hand, in the case of insolvency, allowing an individual to go bankrupt is to re-establish credit between the creditor and the debtor. The implementation of the "Shenzhen Special Economic Zone Personal Bankruptcy Regulations" has strengthened the public’s awareness of personal credit and helped to build Social credit system.
In addition, the legal profession believes that Lao Lai who concealed the transfer of property has no right to become a "legal" bankrupt.
The "Shenzhen Special Economic Zone Personal Bankruptcy Regulations" has been designed with a series of systems to curb debt evasion, such as prosecuting debtors with bankruptcy fraud, strictly restricting debt exemption conditions, setting up a three-year exemption inspection period, and encouraging repayment system guarantees Creditors' rights and interests, etc.
Article 103 of the Regulations stipulates that if a creditor or other interested party discovers that the debtor has obtained the exemption of unliquidated debts through fraudulent means, they may apply to the people’s court to revoke the ruling on exempting unliquidated debts. Warning function.
Text/Reporter Cheng Jie Dong Zhenjie