The application of out-of-court bankruptcy procedure

No.

Question

Answers

1

I have difficulties with making payment for loans and microloans. Can I apply for bankruptcy? If so, where can I apply?

The bankruptcy procedures can be applied to citizens of the Republic of Kazakhstan who comply with the following conditions:

In case of out-of-court bankruptcy:

1) debt does not exceed KZT 5.5 million (1600 MCI);

2) there was no repayment within 12 months;

3) there is no registered property, including those in joint ownership;

4) a settlement has been made with a bank. 

Also, special conditions are provided for recipients of targeted social assistance who have been obtaining it for 6 months and citizens whose debt has not been repaid for more than 5 years.

Out-of-court bankruptcy can be applied exclusively for debts to banks, microfinance organizations and debt collection agencies.

Judicial bankruptcy can be applied by citizens for debts to financial organizations over 1600 MCI (in 2023: KZT 5 million 520 thousand), for all types of debts to other creditors, as well as by those who cannot apply out-of-court bankruptcy due to availability of property.

At the same time, delay in repayment of loan should be at least 12 months and it is necessary to undergo a settlement procedure with banks.

The law also provides for application of solvency recovery procedure, which allows obtaining installment in court to pay debts (up to 5 years), provided that there is a stable income. The recovery plan is co-developed with a finance manager and approved in court. 

The advantage of this procedure is that after it a person does not acquire a "bankrupt" status, therefore, no consequences provided for bankruptcy apply to such a person. 

Please, note the below consequences that a bankruptcy entails: 

1) restriction on obtaining loans and credits for 5 years;

2) subsequent bankruptcy procedure can only by initiated upon expiry of 7 years;

3) financial condition is to be monitored for 3 years after bankruptcy

Upon compliance with the criteria for application of out-of-court bankruptcy procedure, a citizen needs to apply to a local State Revenue Department through e-Gov portal, e-Salyq Azamat and CSC IS. 

Upon compliance with the criteria for application of judicial bankruptcy, a citizen needs to apply to a court at the place of residence.

2

Can I apply for bankruptcy or is it too late, since the case is in the court and bailiffs will deal with it?

You can, if you meet the criteria established for applying to out-of-court bankruptcy, judicial bankruptcy or solvency restoration.

In case of bankruptcy procedure application, consideration of a case on recovery of debt is subject to termination.

3

I am a single mother of two children and have several loans. Can I apply for bankruptcy?

Thank you for your question! Your situation is clear. If no debt repayment has been made within 12 months as stipulated by the Law and a settlement has been made with banks regarding the debts, you can apply for bankruptcy. But note that it entails consequences. You won`t be able to get another loan in 5 years and your financial situation will be under control within 3 years .

You can apply in March. At the moment,you need to contact a bank regarding loan repayment. 

4

The Law states that the indemnification obligations for criminal offenses do not cease. The question is whether lawsuits related to return of illegally obtained income to the state's income under criminal cases are also included here?

Hello! You are right! Such kind of obligations do not cease and court decisions are subject to execution.

5

Does the Law apply to individuals who do not have accounts payable, but have current loans with no debts?

No, the Law is only applied to citizens with overdue debts over 12 months.

6

The Law states that one of the grounds for applying to court for bankruptcy of an individual is failure to fulfill obligations within 12 consecutive months. An individual has a debt in the amount of KZT 45,000,000,000 (forty-five billion), the specified amount was recovered from the individual under court decision in 2020 and to date, an enforcement proceeding has been initiated by a private bailiff and 50% of the salary is withheld (salary is KZT 450.000). Is it possible to appeal to court to initiate bankruptcy procedure or an individual needs to quit a job and have no income for 12 months, i.e. not pay a loan? A debtor has no movable or immovable property, except for salary.

Considering that a citizen has a stable income and a bailiff deducts 50% of salary for repayment of an existing debt, a partial repayment of debt occurs, that is, there is no fact of non-repayment within 12 months.

Moreover, the debt amount of KZT 45.0 billion is recovered under a court decision for a criminal offense, and therefore, according to the provision of Article 46 of the Law "On Solvency Restoration and Bankruptcy of Citizens of the Republic of Kazakhstan" is not subject to discharge due to bankruptcy.

7

Will the bankruptcy cases of individuals be part of special proceedings?

Bankruptcy cases of individuals are considered by courts under the general rules of civil justice with the features established by Law

8

What is the amount of the state fee for submitting a bankruptcy application to a court and solvency restoration?

The state fee has not been established for the current year. To date, an issue of introducing amendments to the Tax Code has been considered, including in terms of establishing the amount of state fee for submitting a bankruptcy application to a court.

9

Which courts will consider applications for bankruptcy and solvency restoration from individuals (economic or civil ones)?

Bankruptcy applications form individuals will be considered in the courts at the place of residence (civil ones)

10

How exactly will the financial situation of a bankrupt be monitored after the procedure completion? 

Monitoring of financial condition after the bankruptcy procedures completion will be carried out based on data about a debtor (nationwide tax reporting), as well as data from authorized bodies. In case if state registration of property will be revealed, a corresponding notification will be sent to creditors. Ostensibility of transaction will be determined by a court

11

What measures are provided to reveal deliberate bankruptcy?

The signs of deliberate bankruptcy will be identified through analyzing the financial condition of a debtor for the period of 3 years prior to submitting a request for application of judicial or extrajudicial bankruptcy procedures. If the facts of property concealment, illegal alienation and other illegal actions will be found out during the pre-bankruptcy period, the out-of-court bankruptcy procedure is subject to termination. During the judicial bankruptcy procedure, a financial manager will attempt to recognize these transactions as illegal in court and return the property to the state. A judicial act declaring the transaction invalid will be the basis for refusing to write-off the debt from a bankrupt according to the procedure results. 

12

How and by whom will the candidacy for a financial manager be determined?

A financial manager is appointed by an authorized body represented by the state revenue bodies. For these purposes, the procedure for selecting and appointing financial managers will be developed.

13

Please clarify the situation. A person has a bank loan agreement at the time of submitting a request for out-of-court bankruptcy and a bank file a lawsuit to recover the debt under the agreement. How to act in this case and how the law regulate such situations? I think, banks will file lawsuits en masse until March 2023.

The Law has a provision (Article 17 of the Law), according to which, from the date of publishing information on the e-Gov portal that an out-of-court bankruptcy procedure has been applied to a debtor, it is prohibited to request from a debtor to fulfill obligations specified in a request for application of out-of-court bankruptcy procedure and it is not allowed to recover money from a debtor's bank accounts to satisfy creditors' claims. Also, execution of court decisions on debt collection is suspended.

14

If my debt to a bank amounts to KZT 1 million, I have no official job and have not been making repayment for 1 year, but I have a vehicle worth KZT 2 million, will it be taken away in case of bankruptcy? A vehicle is the only source of income

Yes. In accordance with the provisions of the Law, a debtor's property includes all the property that is available on the right of ownership. During the procedure, a property is subject to sale and sales proceeds are used for repayment of current expenses of a financial manager and repayment of creditors' claims. The remaining outstanding amount of debt is subject to write-off.

However, you should apply to a court for application of solvency restoration procedure if the value of your property is greater than a debt amount.

15

For how long will the law on bankruptcy be in effect?

The law was signed on December 30, 2022 and officially published on January 1, 2023. The main provisions of the law will take effect from March 3, 2023. The validity period of the law is not limited.

16

When will the Law come into effect and I will be able to write-off my debts?

Unlike a credit amnesty, which entails no consequences, there are significant restrictions in bankruptcy, such as a ban on obtaining new loans for 5 years and control of financial condition for 3 years.

Citizens need to understand that being recognized as a bankrupt, a citizen lowers his/her loan rating, and it is necessary to weigh all the pros and cons, that is, to make a calculated decision on bankruptcy.

If a person wants to get a loan in subsequent years, the banks will analyze his/her financial situation more seriously.

The law was signed on December 30, 2022 and officially published on January 1, 2023. The main provisions of the law will take effect from March 3, 2023.

17

I had had a mortgage loan since 2007, in 2009 I stopped making a loan repayment and a bank transferred my mortgage loan to a regular one. It accrued interest until 2015. In 2015, the bank sold an apartment at auction and the remaining part was recognized as a debt of an individual. Since then, my debt to a bank is KZT 20 million. Is it possible for an individual to apply for bankruptcy procedure, since there is no possibility to repay the debt.

In this case, if a citizen does not have any other loans in a bank and microfinance organizations, he/she can submit a request for application of an out-of-court bankruptcy procedure

18

 Can an imprisoned person apply for bankruptcy procedure? 

Yes. Such a person can apply as the Law does not provide for any special conditions and restrictions for such people.

19

Is there a ban on traveling abroad in case of bankruptcy?

The ban on traveling abroad is established for debtors during the period of judicial bankruptcy procedure application (6 months), since it is necessary for a debtor to directly participate in the sale of property and sign relevant documents. The ban on traveling abroad is imposed by a court and after the procedure completion, the ban is lifted.

20

If a debtor does not make repayment for 3 loans in banks and microfinance organizations for more than 2 years, BUT only repays for a commodity loan as its amount is less. QUESTION: Is it possible to apply for out-of-court or judicial bankruptcy only for loans I don`t pay for? While continue paying for a loan with a lesser amount. Or it is only possible to apply for all the available loans?

Bankruptcy is bankruptcy before all the creditors.

If you do not specify one of the existing creditors in a request for application of out-of-court or judicial bankruptcy procedures, your request will be rejected. 

This requirement was introduced to observe the rights and interests of each creditor, without discrimination.

21

Pursuant to the Law, one of the documents that should be attached to a request (for application of judicial bankruptcy procedure) is a document confirming a debt settlement by a debtor under a bank loan agreement. Question: Do I need to attach this document if there is a court decision available under a bank loan agreement and a case has been under compulsory enforcement for more than 2 years according to the writ of execution?

The requirement to provide documents confirming a debt settlement procedure is mandatory.

Since the case has already been considered in court, accordingly, this document is available and it is necessary to attach it as evidence.

22

When applying for bankruptcy as an individual, does a loan issued by another individual falls under the Law? I borrowed money for business from an individual as an individual and suffered losses (2020 Pandemic, business closed). Currently, I am insolvent. I have no property left and there are loan agreements for which court decisions were issued for recovery. All my accounts have been arrested. For an year there have been no changes. I cannot find a job. In case of bankruptcy, will all my obligations be canceled?

Yes. It is possible to apply a judicial bankruptcy procedure. The situation regarding a debt of an individual to an individual will be considered at a court.

23

If a court approves application of bankruptcy procedure, and I have to leave the country for work, will I be able to do it? Will there be no restrictions? 

A debtor cannot leave the country during the judicial bankruptcy procedure (6 months). After completion of judicial bankruptcy procedure and publication of the list of persons in respect of whom the procedures have been completed, restrictions are lifted and a citizen will be able to leave the country. 

24

Will the bankruptcy procedure (judicial) be applied to a citizen who has a residence permit in the Republic of Kazakhstan?

The Law "On Solvency Restoration and Bankruptcy of Citizens of the Republic of Kazakhstan" applies only to the citizens of the Republic of Kazakhstan.

The Law does not apply to stateless persons, as well as those with a residence permit.

According to the legislation regulating migration issues, this category of citizens may not be willing to get citizenship in the future, therefore, the provisions of the Law apply to citizens of the Republic of Kazakhstan and to debts within the country.

25

Can a guarantor (warranter, pledgor) exercise the right to declare bankruptcy and undergo an out-of-court/judicial bankruptcy procedure?

The provisions of Article 22 of the Law provide for the right of a creditor, including after initiation of a case on application of procedures for solvency restoration or judicial bankruptcy against a debtor, to file claims against guarantors, warrenters and pledgors.

Since after the completion of bankruptcy procedure against a debtor, a creditor is deprived of such an opportunity due to write-off of outstanding claims based on the bankruptcy results.

At the same time, a guarantor (warranter, pledgor) is not deprived of the right to submit a request for application of the procedures established by Law for personal obligations under the condition of complying with the requirements.

26

Since the bankruptcy procedure is voluntary, what measures will be taken against citizens who do not recognize themselves as bankrupts and do not pay for debts?

The Law states that only a debtor will be able to initiate an out-of-court or judicial bankruptcy procedure or a procedure for solvency restoration. Creditors and other third parties will not be able to declare a citizen as a bankrupt. That is, this is a conscious step taken by a citizen after considering all the consequences of being declared as bankrupt.

In respect of those who, having debts, do not apply for bankruptcy, financial organizations have the right to demand debt repayment according to the laws on debt collection activities and on enforcement proceedings.

The implementation of the Law will also affect relations between banks and borrowers. Bank will analyze a financial status of a citizen who wants to get a loan more closely.

The Law does not provide for any measures to citizens who do not submit applications for recognition as bankrupt.

27

The payment for financial managers is carried out at the expense of the state only for citizens from vulnerable social groups. What should others do?

The Law provides that financial managers are appointed by an authorized body after a court has issued an order on initiation of a case on solvency restoration or judicial bankruptcy, while payment for the services of a financial manager is made at the expense of a debtor's property in the amount of 1 minimum salary per month (i.e. KZT 70.000 per month). In this regard, in case of decision on application of a judicial bankruptcy procedure or solvency restoration, it is necessary to find funds to pay for the services of a financial manager. 

Thus, if there is no property, the bankruptcy procedure will not take too much time.

28

A debtor has a land plot pledged under a bank loan agreement, which was previously put up for auction, but was not sold and the tax for a land plot for several years is more than KZT 5 million, therefore a person is registered as debtor. Question: After the sale of this land plot under the judicial bankruptcy, what will happen to accrued taxes and penalties, as well as other debts for which there was not enough money from the sale of property?

During the judicial bankruptcy procedure, all the debts are taken into account and repayment is made accordingly. The remaining outstanding debts are subject to write-off, except for alimony arrears, compensation for damage caused to life or health/damage in criminal cases or debts recovered to the budget under a court decision. Thus, if the amount of tax debt included in the register of creditors' claims as a result of bankruptcy procedure remains outstanding or partially repaid, it is subject to write-off. 

29

Is it possible to apply for judicial bankruptcy against an individual for debt under joint procedure collected under a criminal case?

If, in addition to the debt incurred by a court decision, there is another debt, then it is possible to apply to a court for application of judicial bankruptcy procedure, but it should be taken into account that a debt incurred by court decisions, including those collected under joint procedure is not subject to termination.

30

The claims of an individual under a writ of execution issued on the basis of a court ruling on the approval of a mediation agreement to an individual who wants to declare himself/herself bankrupt will be terminated after such recognition?

Yes. If a debtor declares himself/herself a bankrupt judicially and a debt will remain unpaid under the procedure, it will be written-off.

31

How will the judicial bankruptcy procedure be conducted for debts to the budget collected under a subsidiary procedure?

If, in addition to a debt collected by a court decision within the framework of bringing a citizen to subsidiary liability, there are other debts: taxes, bank loans and others, a citizen has the right to apply to a court for application of bankruptcy procedure, while the amounts collected in a subsidiary manner are not subject to write-off.

32

What benefits are provided for the recipients of targeted social assistance?

If a citizen has been a recipient of targeted social assistance for 6 consecutive months, and also has no property and has undergone a debt settlement procedure with a bank or microfinance organization, then he/she has the right to submit a request for application of out-of-court bankruptcy procedure. 

33

The question regarding the joint property that was inherited. It is the only available housing that has not been pledged. Does a citizen comply with the criteria for out-of-court bankruptcy, since creditors cannot claim the property in court, or if there is property available, then judicial bankruptcy applies?

Since there is property, it is impossible to apply for out-of-court bankruptcy procedure as it does not correspond to requirements for the procedure.

It is possible to apply to a court for application of judicial bankruptcy procedure. Thus, the only housing will remain with a citizen and is not subject to sale for repayment of debts to creditors. 

34

I have debts for more than KZT 5.5 million. If there is no immovable/movable property (except for clothes and a phone), is it possible to apply for bankruptcy? Is it mandatory to provide a proof of debt settlement with banks and microfinance organizations prior to submitting a request for bankruptcy? If so, how do I do it?

Based on the question, a citizen falls under the requirements for judicial bankruptcy. A document confirming a debt settlement with a bank and a microfinance organization is mandatory.

Regarding a debt settlement procedure with a creditor.

The procedure for overdue debts settlement for citizens experiencing difficulties in repaying the loan has been in effect in Kazakhstan since October 1, 2021. It applies by the banks and microfinance organizations. 

Borrowers who have a delay in repayment should contact a bank and/or microfinance organization within 30 days from the date of its occurrence to resolve the issue. 

In an application, a debtor should indicate what caused the delay, offer the options for solving an issue and provide supporting documents indicating a decrease in income and inability to pay on a loan. 

Failure to submit the requested documents is the basis for refusing to consider a borrower's application.

A bank or microfinance organization reviews anapplication and provides a response within 15 calendar days: 

- can grant consent by accepting the changes proposed by a borrower to the terms of a contract; 

- can provide their suggestions on changing the terms of a contract;

- refuse, but with an indication of a substantiated reason. 

The conditions for changing a contract can be as follows: 

- reduction of remuneration rate, 

- deferred payment; 

- extension of loan term, etc. 

Another suggestion may include independent sale of real estate, which is a subject of mortgage.

If a borrower failed to reach an agreement with a lender on the terms of loan, he/she has the right to apply to the Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan and submit all the documents and correspondence with a bank and a microfinance organization.

You can find out more about the unified procedure for debt settlement by calling the Call Center (1459) or through Fingramota Online mobile app. 

35

There is a debt to Kaspi Bank. The delay is more than 5 years. The only housing is a cottage that burned down and is now under construction. I have 3 children, the youngest one is 6 years old. The debt is small, about KZT 300,000 and it has already been transferred to debt collectors. Will this debt be written-off?

Based on the above situation and in view of non-repayment of debts to a bank for more than 5 years, it is possible to apply the out-of-court bankruptcy procedure.

But keep in mind the consequences of the bankruptcy procedure: 

1) restriction on obtaining loans and credits for 5 years;

2) subsequent bankruptcy procedure can only by initiated upon expiry of 7 years;

3) financial condition is to be monitored for 3 years after bankruptcy.

36

Is it possible to apply for out-of-court bankruptcy if a citizen has 4 obligations to microfinance organizations and second-tier banks? The repayment delay period for 2 loans is 15 months, for the rest it is 6 months?

A citizen has the right to apply for out-of-court bankruptcy procedure if there is a delay for more than 1 year. Note that this period is not taken into account in relation to persons receiving targeted social assistance over the past 6 months.

37

Upon completion of which of the 3 procedures provided for by Law, the ban on leaving the Republic of Kazakhstan remains: out-of-court bankruptcy, judicial bankruptcy or solvency restoration?

The ban on traveling abroad is established for debtors during the period of judicial bankruptcy and solvency restoration, since it is necessary for a debtor to directly participate in the sale of property and sign relevant documents.

After completion of the procedure (out-of-court bankruptcy, judicial bankruptcy, solvency restoration), there are no restrictions on traveling abroad.

38

Is there a criminal liability of a citizen/financial manager for violating the requirements of the Law or for actions/inactions within the procedures provided for by Law? 

There is no criminal liability yet, though there is an administrative liability (fines up to 200 MCI);

39

Can a citizen independently conclude an agreement with a financial manager to exercise his/her powers with a person whose notification is included into the register of notifications of persons entitled to carry out the activities of a financial manager as part of the procedure for restoring solvency by analogy with the Law "On Solvency Recovery and Bankruptcy"? 

In accordance with the provisions of the Law, financial managers are appointed by orders of an authorized body and a debtor is not entitled to select a financial manager. 

At the same time, after the order on an appointment of a financial manager has been issued, there is no restriction for a debtor to conclude agreements with a financial manager on issues related to a procedure (payment procedure, etc.)

40

Are there any specific signs for recognition of citizens' transactions invalid in accordance with Article 14 of the Law?

The recognition of a debtor's transactions as invalid and return of property may take place in case of establishing the fact of ostensible transaction and other facts provided for by the Civil Code of the Republic of Kazakhstan. Ostensibility of a transaction should be proved in court.

41

When submitting documents for out-of-court bankruptcy procedure, it is necessary to provide documents confirming debt settlement (letters, appeals to banks, microfinance organizations, their answers, if available). Question: Will there be any specific format or sample of these documents? Many requests are usually made by people in the format of an application on their phone, which is now technically impossible to obtain, even if requested from banks, the probability of providing electronic requests by banks is low. Question: Does a debtor need to prove the cause of debt?

A request for application of judicial bankruptcy procedure or solvency restoration according to Article 20 of the Law should contain the name of a court to which a request is submitted, justification for inability to satisfy creditors' claims, a list of attached documents.

A list of all creditors and debtors should be attached to a request (indicating the amounts owed and dates of their formation, address of residence or location, e-mail and contact phone numbers (if such information is available) for their subsequent notification), an inventory of property with an attached report on its assessment (if any), a list of all obligations, a copy of a document confirming a debtor's acceptance of measures to settle a debt under a bank loan agreement and (or) a micro-loan agreement (a letter from a citizen or a bank response). Provision of other documents (evidence) is not required. 

42

What will happen to the restriction on leaving the Republic of Kazakhstan imposed on a debtor under the enforcement proceedings in the event of judicial bankruptcy, as well as in the case of solvency restoration? 

In accordance with the provisions of the Law, after a court's ruling on initiation of a case on application of procedure for restoring solvency or judicial bankruptcy, execution of decisions of government agencies, other bodies and organizations for which a debtor is obliged to transfer property, make payment or otherwise fulfill property obligations is suspended. 

In this connection, measures in the form of restrictions on leaving the country for enforcement proceedings are subject to suspension.

Upon completion of the procedures specified in the Law (judicial bankruptcy and restoration of solvency), there are no restrictions to leave the Republic of Kazakhstan. 

43

Clause 1 of Article 14 of the Law states that "Transactions are deemed invalid if they are made by a debtor or a person authorized by him/her within three years prior to initiation of proceedings on the application of solvency restoration procedures and judicial bankruptcy, if there are grounds provided for by the civil legislation of the Republic of Kazakhstan". Can you explain the mechanism and viability of this Clause. For example: A seller sells an apartment or a car to a bona fide buyer. Two years later, a seller applies for bankruptcy and hides this transaction from the relevant authorities. A buyer, in accordance with Clause 3 of the Article, is obliged to return a property (apartment) to a seller, and apply (a seller does not have money) for the third line of satisfaction under Article 40. How are the rights of bona fide buyers protected in this case? 

Recognition of transactions as invalid and return of property is an effective mechanism for protecting the interests of both a debtor and creditors.

The transactions are recognized as invalid in court, such a claim may be made in case of establishing the fact of ostensible transactions made under the influence of deception and other grounds provided for by the Civil Code of the Republic of Kazakhstan. Ostensibility of a transaction should be proved in court. 

In the event there is a court decision to satisfy an applicant's claim and invalidate a transaction, a defendant is obliged to return everything received under such a transaction.

In this case, a defendant acquires the right of claim against a debtor, which is subject to satisfaction in the third line.

In order to clarify the circumstances that are essential to the case and to make a reasoned decision by a court, it is necessary for a defendant (buyer) to prove during a trial that there is no improper behavior on his/her part and there are no signs of ostensible transaction.

44

I took a loan to buy a one room apartment in Almaty. I paid most of it, but I cannot afford paying further. The Kaspi bank took an apartment and I still owe it KZT 4 million. I tried to settle the issue and unsuccessfully applied to public prosecutor's office. A ban to leave the Republic of Kazakhstan was imposed against me. There is no way I can prove that I don't owe anything as my apartment was taken away from me. Question: How my debt can be written off for 100%?

If complying with the requirements for the procedures provided for by the Law, you have the right to submit a relevant request.

In case of out-of-court bankruptcy:

1) debt does not exceed KZT 5.5 million (1600 MCI);

2) there was no repayment within 12 months;

3) there is no registered property, including those in joint ownership;

4) a settlement has been made with a bank. 

Also, special conditions are provided for recipients of targeted social assistance who have been obtaining it for 6 months and citizens whose debt has not been repaid for more than 5 years.

Out-of-court bankruptcy can be applied exclusively for debts to banks, microfinance organizations and debt collection agencies.

Judicial bankruptcy can be applied by citizens for debts to financial organizations over 1600 MCI (in 2023: KZT 5 million 520 thousand), for all types of debts to other creditors. 

At the same time, delay in repayment of loan should be at least 12 months and it is necessary to undergo a settlement procedure with banks.

The law also provides for application of solvency recovery procedure, which allows obtaining installment in court to pay debts (up to 5 years), provided that there is a stable income. The recovery plan is co-developed with a finance manager and approved in court. 

The advantage of this procedure is that after it a person does not acquire a "bankrupt" status, therefore, no consequences provided for bankruptcy apply to such a person. 

Please, note the below consequences that a bankruptcy entails: 

1) restriction on obtaining loans and credits for 5 years;

2) subsequent bankruptcy procedure can only by initiated upon expiry of 7 years;

3) financial condition is to be monitored for 3 years after bankruptcy

Upon compliance with the criteria for application of out-of-court bankruptcy procedure, a citizen needs to apply to a local State Revenue Department through e-Gov portal, e-Salyq Azamat and CSC IS. 

Upon compliance with the criteria for application of judicial bankruptcy, a citizen needs to apply to a court at the place of residence.

45

According to Article 5 of the Law, the grounds for submitting an application to an authorized body for application of an out-of-court bankruptcy procedure are the conditions where procedures for the settlement and (or) recovery of unfulfilled obligations have been carried out against a debtor, which should be carried out within a period not exceeding eighteen months from the date of occurrence of overdue debts. Question: We sent a letter sent to a bank and it did not provide any answer. In the letter we indicated the period of failure to make a repayment of 18 months. Does it comply with the requirements? And regarding a debt for which a court decision was made and it is in under judicial enforcement. No payments are made for it either. Does it also comply with the requirements?

Undergoing of a debt settlement procedure with a loan institution is mandatory. The documents confirming undergoing of debt settlement with a loan institution as specified in Article 16 of the Law are the responses of a second-tier bank, a microfinance organization on refusal to change the terms of a bank loan agreement and (or) a micro-loan agreement with justification of refusal.

If a second-tier or a microfinance organization does not provide a response to a debtor's application, a document confirming the procedure is a copy of a debtor's application or confirmation of sending an application online.

Regarding the debt for which there is a court decision and enforcement proceedings have been initiated, we inform you that since the case has already been considered in court, accordingly, a document on debt settlement is available and should be attached as evidence.

46

I have two loans at Kaspi bank, one of the loans I borrowed as an individual entrepreneur and another one as a citizen. What should I do in this situation? Kaspi bank considers all loans together, it is not possible to pay separately. Can I apply for bankruptcy as an individual?

To date, amendments have been made to the solvency recovery and bankruptcy legislation regarding the bankruptcy of an individual entrepreneur and the possibility of including debts owed to creditors as an individual (personal debts) into the number of creditors for bankruptcy of an individual entrepreneur is provided.

47

A person has 4 enforcement proceedings, one is withholding (income disability benefit), is it considered as repayment? Can the bankruptcy procedure be applied in this case?

In order to apply the procedures of bankruptcy and solvency restoration, delay in loan repayment for at least 12 months for all types of obligations of the citizen is taken into account. 

48

Will this Law be applied to entrepreneurs?

The Law "On Solvency Restoration and Bankruptcy of Citizens of the Republic of Kazakhstan" does not apply to citizens registered as individual entrepreneurs.

Thus, amendments have been made to the solvency recovery and bankruptcy legislation regarding the bankruptcy of an individual entrepreneur and the possibility of including debts owed to creditors as an individual (personal debts) into the number of creditors for bankruptcy of an individual entrepreneur is provided.

49

Will the only housing be sold at auction as collateral and non-collateral?

A creditor has the right to withdraw a debtor's only dwelling during the bankruptcy proceedings only if it is the subject of collateral. If the only housing is not a pledge, creditors will not be able to claim it.

50

For obligations to creditors specified in an application, there is no repayment within twelve consecutive months on the date of filing such an application. Should this be understood that there cannot be any consecutive repayments or any repayments (1-2 repayments) within 12 months? What amount is considered as a repayment amount? Starting from KZT 1 and more?

The delay in repayment of loan should be at least 12 consecutive months, the repayment amount is considered to be any amount received as repayment of debt owed to a lender.