The first case of personal bankruptcy in the country appeared, and "Lao Lai" would not have to pay back in the future? What restrictions will be placed on the life of a "bankrupt"?

On November 8, the Shenzhen Intermediate People's Court ruled that the debtor Hu mou was bankrupt, and the first case of a "bankrupt" appeared in China. Hu's existing assets are not enough to pay off debts of more than 1.4 million yuan, and will enter a three-year exemption period.

After the emergence of the first "bankrupt", the voice of "the regulations are the umbrella of the old lai" has emerged in an endless stream, and Hu Jun, a lawyer for the bankruptcy administrator of a certain case, said that during the three-year exemption period, many of the debtor's rights will be restricted, which is a state of "loss of rights", and the debtor's performance of the obligation to cooperate in the bankruptcy procedure is precisely the embodiment of its implementation of the principle of social credit.

The Regulations on Personal Bankruptcy in the Shenzhen Special Economic Zone were officially implemented on March 1 this year, and China officially began to explore the personal bankruptcy system from the legislative level. In fact, as early as a few decades ago, countries and regions such as Hong Kong, Japan and South Korea already had laws related to personal bankruptcy.

01

Shenzhen is now the first personal bankrupt in China

On March 1 this year, the Shenzhen Special Administrative Region took the lead in implementing the Personal Bankruptcy Regulations in the country. When the debtor is unable to pay off the debts that are due, creditors who, alone or jointly hold more than 500,000 yuan of matured claims against the debtor, may submit a bankruptcy application to the people's court and apply for bankruptcy liquidation of the debtor. It is understood that in the first month of the implementation of the personal bankruptcy system, the Shenzhen Intermediate Court received a total of 260 personal bankruptcy applications, giving priority to accepting bankruptcy applications from 8 individual debtors. Most of the applications are aimed at alleviating debts through restructuring and settlement.

Due to the closure of the education and training institution operated by Hu, he was unable to repay his debts, and on November 8, the Shenzhen Intermediate People's Court ruled that the debtor, Hu, was bankrupt. The case became the first personal bankruptcy liquidation case in China.

According to the Securities Times, Hu originally operated an education and training institution in a shopping mall in Shenzhen. Affected by the collapse of the mall, the training institution had to close, resulting in a debt of more than 4.8 million yuan. In 2018, Hu sold his only house, and actually collected 2.6 million yuan, all of which was used to repay debts, but still has more than 1 million yuan in debt. Hu mou currently has no fixed job, with a monthly labor income of about 5,000 yuan, and has raised his daughter alone since his divorce in 2013.

On June 9 this year, due to his insolvency, Hu submitted an application for personal bankruptcy liquidation to the Shenzhen Intermediate Court. The Shenzhen Intermediate People's Court held that Hu's property was insufficient to pay off all debts and met the conditions for declaring bankruptcy. On November 8, the Shenzhen Intermediate People's Court delivered the documents to Hu and formally ruled to declare him bankrupt. According to the ruling, from the date of declaring bankruptcy, Hu will enter a three-year exemption period. In order to ensure The normal life of Hu, the creditors' meeting voted to approve her list of exempted assets, including sofas, coffee tables, Millet mobile phones and other daily necessities. "Thanks to the Personal Bankruptcy Ordinance, I have the opportunity to be financially 'reborn.'" Hu mou told the media.

02

Is it "honest and unfortunate" or "old-fashioned"?

According to CCTV News, the essence of the personal bankruptcy system is to fairly clear the creditors' and debtors' creditors' and debtors' creditors' rights and debts through legal intervention, and its value lies in safeguarding the interests of creditors and giving "honest and unfortunate" debtors the opportunity to be reborn. So how do you determine that a debtor in a personal bankruptcy proceeding is "honest and unlucky"?

Hu Jun, a lawyer for the bankruptcy administrator in the Hu case, said that after the creditor's bankruptcy application is accepted, the court, the bankruptcy administration and the bankruptcy administrator will make a comprehensive judgment on the creditor's declaration materials, current liabilities and ability to perform.

Hu Jun introduced that the primary criterion for judging whether the debtor meets the "honesty and misfortune" is whether the debtor has truthfully fulfilled its reporting obligations, taking The Case of Hu as an example, "the property and debts she declared are basically consistent with the investigation and verification of the later administrator, and the reasons for bankruptcy stated can correspond to the experience and investment of starting a company." In addition, the composition of Hu's claims is relatively single, all of which are the liabilities of financial institutions, so the proportion of creditors' rights, debts and principal interest is relatively clear, which is convenient for all creditors to verify each other's claims, and it is also conducive to the court and the bankruptcy administrator to make legal judgments on the determination of claims in the case.

After receiving Hu's bankruptcy application, Hu Jun, as the administrator, conducted an on-site investigation of the case and visited the relevant rights holders of Hu to verify the authenticity and objectivity of the declaration materials. Hu Jun said that the people's court was very cautious when reviewing and approving the list of exempted assets, for example, when considering the maintenance of Hu's daughter, the bankruptcy administrator should take into account both the current minimum living standard in Shenzhen and the objective situation that Hu and her ex-husband were divorced. Because Hu and her ex-husband jointly undertook the maintenance obligation of their daughter, the court finally identified the maintenance fee as half of the minimum living standard of 2200 yuan / month in Shenzhen.

The "Lao Lai" incident is endless, and the focus of public discussion is: What if "Lao Lai" is judged to be "honest and unfortunate"? In this way, while protecting entrepreneurs, does the personal bankruptcy system also play a protective role for some old lai?

Hu Jun said that everyone thinks that the "Regulations" are "a safe haven for the old Lai", which is actually a misunderstanding of the "Regulations". In fact, he said, during the three-year exemption period, many of the debtor's rights will be restricted, which is a state of "loss of rights", and the debtor's performance of the obligation to cooperate in the bankruptcy proceedings is precisely the embodiment of its implementation of the principle of social credit. In fact, the screening mechanism from 'loss of authority' to 'restoration' is precisely the criterion for distinguishing 'honest and unfortunate' debtors from 'old lai'. ”

The Regulations stipulate that a natural person who applies to become a bankrupt is first of all a natural person who needs to reside in the Shenzhen Special Economic Zone and has participated in Shenzhen social insurance for three consecutive years. At the same time, if the applicant files for bankruptcy based on improper purposes such as transferring property, maliciously evading debts, or harming the reputation of others, or if the applicant has made false statements, provided false evidence, and other acts that hinder bankruptcy procedures, the court will reject it.

After the personal bankruptcy application, it does not mean that the debtor does not have to repay the money, but will reduce the interest and late fees and other fees. At the same time, if, during the investigation period, the debtor has malicious debt evasion or bankruptcy fraud, the debtor will not only not be able to forgive the debt, but will also be punished by law.

03

Do I still have to pay back my money when I am bankrupt?

According to Hu Jun, Hu was formally ruled by the people's court to declare bankruptcy on November 8, officially declaring that the debtor had lost the ability to repay the debt, thus entering the legal sense of exemption from liability.

It is understood that there are three types of personal bankruptcy procedures, namely reorganization, settlement and liquidation. "The reason why the debtor has been able to go to the liquidation process means that from the current value judgment, the debtor has reached the point of inability to repay the debts as they fall due and lacks solvency." Hu Jun said that the debtor's income and expenditure are basically covered, but in fact, the debtor does not sit still, and does not give up the right and opportunity to seek a better and higher career because of bankruptcy liquidation. In principle, as long as the relevant prohibition provisions during the inspection period are not violated, after the expiration of the three-year period, they will apply to the court in accordance with the law to terminate the inspection period, and after the court rules and approves, the debtor's debts will be discharged from then on.

According to the Regulations on Personal Bankruptcy of the Shenzhen Special Economic Zone (hereinafter referred to as the "Regulations"), since the date of declaration of bankruptcy, Hu has entered a period of exemption from liability. Hu must restrict consumption behavior in accordance with regulations, and at the same time accept the supervision of the bankruptcy administrator and the bankruptcy affairs management department, declare personal income, expenditure and property status and other information every month, deduct monthly necessary expenses such as alimony, maintenance, living expenses, etc., and the remaining income is used to repay debts. At the same time, the bankruptcy administration department will inspect and supervise the changes in the debtor's income, expenditure, property, etc., as well as the administrator's performance of duties, and disclose it in accordance with law.

After the expiration of the exemption inspection period, the Shenzhen Intermediate Court will rule on whether to waive the outstanding debts and lift the restrictive behavior based on the performance of Hu during the inspection period. "The exclusion period allows both 'honest and unfortunate' debtors to be 'reborn' and avoids the emergence of malicious bankruptcy." Cao Qixuan, president of the bankruptcy division of the Shenzhen Intermediate Court, said.

At the same time, the debtor after filing for bankruptcy also has certain travel and shopping restrictions. Article 23 of the Regulations makes it clear that from the date on which the people's court makes a decision to restrict the debtor's behavior to the date on which the decision to lift the restriction on the debtor's behavior is made, the debtor's convenience such as travel and shopping will be restricted to a certain extent, unless it is truly necessary for living and working and with the consent of the people's court. For example, it is not allowed to take the first class or above in the business class or first class of the aircraft, the soft sleeper of the train, the second class or above of the steamship, the first class or above of the high-speed railway and other EMU trains; it is not allowed to spend in nightclubs, golf courses, three-star hotels or above, hotels and other places; it is not allowed to purchase real estate or motor vehicles; and it is not allowed to provide children with high-fee private schools.

04

Hong Kong, Japan, and South Korea have long had "bankrupts"

Hu mou is the first "bankrupt" in the legal sense of the Chinese mainland, but in Hong Kong, China, Japan, South Korea and other places, the personal bankruptcy system has a history of decades. Zhong Zhentao, a famous Hong Kong movie star, has also applied for personal bankruptcy due to the failure of investment in the property market.

According to media reports, after the outbreak of the financial crisis in 1997, the Hong Kong property market fell sharply, and a group of Hong Kong citizens who chased high to buy houses were deeply trapped, including the singer Zhong Zhentao. At that time, Zhong Zhentao, who had been debuting for more than 20 years, encountered a "middle-aged bottleneck" in his acting career, he wanted to make progress in investment, followed the current and started a real estate business, and in 1996, he successively purchased a number of mansions with a total value of more than 150 million Hong Kong dollars, which were mostly borrowed in the name of the company. Zhong Zhentao's investment failed, and he also had to bear high interest on borrowings, and the debt principal and interest accumulated to HK$250 million. In July 2002, Zhong Zhentao filed for bankruptcy, and in October of the same year, the court ruled that Zhong Zhentao was bankrupt.

According to the relevant provisions of Hong Kong's Bankruptcy Ordinance at that time, Zhong Zhentao moved out of the mansion and lived on renting a house, and the money earned had to be handed over to the Hong Kong Bankruptcy Administration, which gave subsidies according to his living needs, and the rest of the income was used to repay debts. During the bankruptcy period, Zhong Zhentao spent HK$2,000 to HK$3,000 per month on food, 4,000 to 8,000 yuan in rent, and 500 to 800 yuan on clothes and haircuts. The daily transportation fee is only 20 to 30 yuan. It was not until October 2006 that the court approved Zhong Zhentao's discharge from bankruptcy. Since then, Zhong Zhentao has devoted himself to his acting career and started a new life in his life.

Source: CCTV News, Securities Times, China News Network, etc