The husband and wife who evaded debts by means of "personal bankruptcy" were terminated by the court: against "honesty and misfortune", will be investigated

Source: The Paper

A couple in Zhejiang who failed to do business claimed to be "personal bankruptcy" and applied to the court for centralized liquidation of personal debts, during which they invested in a number of companies and did not truthfully declare to the court, and many of the income was not used to pay off debts.

The Paper learned from the Longyou County Court in Quzhou City, Zhejiang Province, on February 10 that a few days ago, the court ruled on the centralized liquidation procedure for the personal debts involved by the husband and wife in accordance with the law, and terminated the centralized liquidation procedure for the personal debts of Mr. and Mrs. Hu and Mr. Wu in accordance with the law. In the next step, the court enforcement department will investigate and confirm based on the relevant clues found, and decide whether to take further disciplinary measures against them based on the results.

Mr. Hu and Mr. Wu have been engaged in foreign trade for many years, and have invested in trading companies, and they owe a large amount of debt due to poor management. Later, the creditors sued the court one after another, and the two became the executors, involving 22 cases and an amount of more than 3.8 million yuan. In the compulsory enforcement, the property and vehicles under the names of the two people were disposed of according to law and used to repay debts. The latter two went to a foreign enterprise to engage in foreign trade work and held management positions. On October 22, 2021, the two applied to the Longyou Court for debt liquidation and signed a letter of commitment to good faith on the grounds that they could not pay off their debts as they fell due and their assets were insufficient to pay off all their debts.

After acceptance, the Longyou court appointed Zhejiang Nonjian Law Firm as its administrator. According to the relevant information in the property declaration form filled in by the applicant, the administrator went to Mengcheng, Anhui, Lanxi, Zhejiang and other places to investigate and verify. However, the manager's investigation found that the applicant had invested in a number of companies but did not declare them truthfully, and there was more evidence that there was still a lot of income that had not been used to pay off debts. In the face of the manager's questioning, Mr. Hu and Mr. Wu said that these companies were invested many years ago, and the company did not have any property under its name, nor did it have any value.

The administrator found that the applicant not only had an incomplete and untrue asset declaration, but in the communication with him, the cooperation between the two people was low and the attitude was negative, which affected the normal progress of the clean-up procedure.

Subsequently, the Longyou court held a creditors' meeting of Hu and Wu in the centralized liquidation procedure for their personal debts, but the two refused to attend the creditors' questioning without justifiable reasons, nor did they make a reasonable explanation and explanation of the administrator's findings through other means.

After the creditors voted on the integrity of the applicant, none of the creditors voted in good faith for the two. The relevant creditors said that according to the results of the administrator's investigation, they re-examined the attitude of the two to the debt and believed that the applicant lacked basic good faith and there was no need to exempt their debts. Subsequently, the Longyou Court ruled in accordance with the law to terminate the centralized liquidation procedure for personal debts.

The judge said that the centralized liquidation procedure for personal debts was originally designed so that "honest and unfortunate" applicants can untie their debts through the system and re-participate in social and economic activities, so that they can be smoothly relieved and start all over again. If it deliberately conceals or fails to truthfully declare, then the personal debt liquidation procedure is a good "mirror", so that the concealment of property, evasion of enforcement and other behaviors are obvious, and will not let the "false cleanup, real debt evasion" plot succeed.

Since December 2020, the Zhejiang Provincial High Court issued the Guidelines for the Centralized Liquidation of Personal Debts of Zhejiang Courts (For Trial Implementation), there have been many vivid cases in various parts of the province that have successfully unloaded their debt burdens and started a new life through this procedure.