Apply for centralized liquidation of personal debts
But it does not declare assets truthfully
There is still a significant amount of income that has not been used to pay off debts
When voting in good faith at a meeting of creditors
No creditor votes in good faith!
ultimately......
Not only was the court ruled to terminate the debt settlement process
Enforcement measures were also taken
"The applicant has acted dishonestly ... It was ruled to terminate the centralized liquidation procedure for the personal debts of Mr. Hu and Mr. Wu. Recently, the Longyou County People's Court dropped the hammer on the case of the applicant Hu X and Wu X and his wife's centralized liquidation of personal debts (hereinafter referred to as individual debt clearance).
Heavily indebted
The two applied for a debt clearance
Mr. and Mrs. Hu and Mr. and Mrs. Wu have been operating foreign trade businesses for many years, and have invested in trading companies, and due to poor management, they have incurred large debts. As the creditors sued the court one after another and applied for enforcement, the two became the executors, and 22 cases were enforced, involving an amount of more than 3.8 million yuan.
In the enforcement procedure, the real estate and vehicles under the names of Mr. and Mrs. Hu and Mr. Wu were disposed of in accordance with the law and used to repay the execution debts. After that, the 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 that, the Longyou court accepted the case according to law and appointed Zhejiang Nonjian Law Firm as its administrator.
In-depth investigation and verification
Spot dishonest behavior
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 carry out investigation and verification work.
The administrator found it in the survey
The applicant has invested in a number of companies
However, it was not truthfully declared
There is more evidence pointing to it
In response to the manager's questioning, the applicant stated that these companies were all companies that he had invested in many years ago, and that the companies did not have any property under their names and did not have any value.
The applicant not only had an incomplete and untrue asset declaration, but in the process of communication between the manager and him, the cooperation between the two was low, and the attitude became more negative, which affected the normal progress of the clean-up procedure.
Refusal to accept questioning
The vote was not passed in good faith
Recently, the Longyou court held a meeting of creditors in the centralized liquidation procedure for the personal debts of Mr. and Mrs. Hu and Mr. Wu, and the two refused to attend the questioning of the creditors without justifiable reasons, nor did they make reasonable explanations and explanations of the results of the administrator's investigation through other means. Subsequently, the creditors voted on the integrity of the applicant, and none of the creditors voted in good faith for the two.
Looking at the results of the manager's investigation, and then examining the attitude of the two people towards the debt, they lack basic integrity and it seems that there is no need to forgive their debts. ”
Creditor Mr. Zhang said after the vote.
Subsequently, the Longyou Court ruled in accordance with the law to terminate the centralized liquidation procedure for personal debts.
The judge said:
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. Since December 2020, the Zhejiang Higher People's Court issued the "Guidelines for the Centralized Liquidation of Personal Debts of Zhejiang Courts (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.
However, there are also a small number of debtors who have targeted the humane characteristics of the system and tried to achieve malicious debt evasion through the procedure. Therefore, in the process of debt liquidation, it is particularly crucial to distinguish between debtors who have the capacity to perform but refuse to perform the obligations set forth in the effective legal instruments and debtors who are "honest and unfortunate".
In addition to determining whether there is a need to terminate the debt liquidation procedure (including whether the applicant has acted in good faith) through property declarations and other means, by creating procedures such as voting on the creditworthiness of the creditors' meeting on the applicant, the voting results are taken as an important reference for judging whether the applicant is "honest and unfortunate", which not only reflects full respect for the wishes of the creditors, but also is a "preliminary test" related to whether the settlement agreement can be successfully reached thereafter.
If the applicant is determined to have untrustworthy conduct or other prescribed circumstances, the people's court will terminate the liquidation of individual debts in accordance with law, and will take compulsory enforcement measures such as inclusion in the list of judgment defaulters for the applicant in accordance with relevant provisions. Applicants may also face reprimands, summonses, fines, or detention, and if they constitute a crime, they will also be investigated for criminal responsibility in accordance with law.
In this case, the two applicants had dishonest behaviors such as not truthfully declaring their assets and having a lot of income not used to pay off their debts, and in the end, the court ruled to terminate the debt liquidation procedure and take compulsory enforcement measures against them. The executive department of the court will also take further disciplinary measures against it according to law based on the relevant clues found. This is to sound the alarm bell for applicants who have a fluke mentality, if they deliberately conceal or fail to declare truthfully, then the personal debt liquidation procedure is a good "mirror", so that the concealment of property, evasion of execution and other behaviors are obvious, and will not let the "false cleanup, real debt evasion" plot succeed.
Links to Laws:
Article 54 of the Guidelines for the Centralized Liquidation of Personal Debts of Zhejiang Courts (for Trial Implementation) Article 54 Where, after accepting an application for centralized liquidation of personal debts, the people's court discovers that the debtor has any of the following circumstances, it may rule to terminate the centralized liquidation procedure for personal debts:
(1) The debtor is incomplete, erroneous or otherwise misleading in the application or property declaration and other documents;
(2) The debtor has disposed of the property at a low price or maliciously engaged in biased liquidation in the two years prior to the application;
(c) the administrator inquires about the situation in the debtor's application, and the debtor fails to give a formal response within the prescribed time limit;
(4) Other circumstances such as the debtor's dishonest conduct that requires the termination of the centralized liquidation procedures for personal debts.
After terminating the procedures for the centralized liquidation of personal debts, where conditions are met, the people's courts shall follow relevant provisions to employ compulsory enforcement measures such as inclusion in the list of judgment defaulters.
Article 59 of the Guidelines for the Centralized Liquidation of Personal Debts of Zhejiang Courts (for Trial Implementation) Article 59 Where a debtor or other interested party violates the relevant provisions of these Guidelines and commits any of the following acts, the people's court shall reprimand, summon, fine, or detain in accordance with law; where a crime is constituted, criminal responsibility shall be pursued in accordance with law:
(1) Refusal to cooperate with or assist the people's courts or administrators in their investigations, refusal to answer inquiries, or refusal to submit relevant materials;
(2) Providing false or altered information, making false or misleading statements;
(3) Deliberately carrying out or assisting in the concealment, transfer, destruction, or improper disposal of property, property rights and interests, financial certificates, and other materials and objects, or other conduct that improperly reduces the value of property;
(4) Other obstructive conduct.
Article 313 of the Criminal Law of the People's Republic of China: Where a people's court's judgment or ruling is capable of being enforced but refuses to do so, if the circumstances are serious, he shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention or a fine;
Where a unit commits the crime mentioned in the preceding paragraph, it shall be fined, and the persons who are directly in charge and other persons who are directly responsible for the crime shall be punished in accordance with the provisions of the preceding paragraph.