01 / END-TO-END PERSONAL INSOLVENCY
Lawful release from debts under loans, payday loans, utility bills and taxes. We run the procedure from the first conversation to the court's ruling.
AN HONEST CAVEAT
We do not promise that debts will be written off “whatever happens”: that decision belongs to the arbitrazh court. What we do at the first consultation is go through your situation and say plainly whether the grounds for insolvency exist, what will be written off, what will remain and what the risks are. If insolvency is not in your interest, we will say so and suggest another route.
02 / WHAT IT IS
Insolvency is a court procedure at the end of which the court may release a person from debts he or she objectively cannot pay.
The rules are set by Federal Law No. 127-FZ of 26 October 2002 “On Insolvency (Bankruptcy)”; the personal insolvency procedure has been in force since 1 October 2015.
Only an arbitrazh court — the Russian state commercial court — can declare a person insolvent, and only where that person is unable to meet obligations to creditors. No company, no “anti-collector” and no agency can make you bankrupt: they can only prepare the case and run it in court.
An individual may apply to the arbitrazh court for any amount if it is clear that payment will not be possible. Where the debt exceeds RUB 500,000 and is more than three months in arrears, filing becomes an obligation. For smaller debts Chapter X § 5 of the Insolvency Law (Articles 223.2 to 223.7) provides a free out-of-court procedure through the multifunctional public service centres (MFC) — its conditions are set out below, in the section on consequences.
The procedure can be gone through alone or with lawyers. The difference is not in the law but in the cost of a mistake.
03 / RISKS
RISK 01
An error in the application or an incomplete set of documents, and the case does not move until the defects are cured. Article 213.4 of Federal Law No. 127-FZ sets out the compulsory annexes. Time passes and the debt grows.
RISK 02
If the financial administrator's remuneration is not paid into the arbitrazh court's deposit account, the proceedings may be discontinued.
RISK 03
Transactions carried out by the individual and his or her spouse over the past three years may be challenged. Challenges during the procedure lengthen it and reduce the insolvency estate.
RISK 04
Debt restructuring instead of the realisation of assets (or the reverse), chosen without regard to the financial position, drags the case out: fines and penalties are written off and the payment period is extended — but the debt still has to be paid.
RISK 05
The court may decline to release the debtor from the obligations (art. 213.28(4) of Law No. 127-FZ) — the procedure is over and the debts remain.
RISK 06
In that case all the fines, arrears and penalties accrued while the case was heard are added to the debt. You can apply again, but time and money have already been lost.
We check these risks before the application is filed and tell you about them before the engagement is signed.
Do not risk the procedure — let us review your situation before you file
A review before you file: the composition of the debts, the assets, transactions over three years and the real chances of release from the obligations. With an engagement it is free.
04 / WHAT YOU GET
We take on the bulk of the work. From you we need documents, a power of attorney and answers to questions — and, by law, the handover of bank cards to the financial administrator and disclosure of information about your assets (art. 213.9(9) of Law No. 127-FZ).
About personal insolvency, in plain language and without the legalese.
Whether the procedure suits you, what will be written off, what will not and what you are risking.
Yours and your spouse's: these are what most often cause trouble in the procedure.
From then on the banks and collection agencies deal with us, not with you.
The complete set for the arbitrazh court, as a single list.
Representation in court throughout the case and support until the procedure is complete.
05 / THE PROCEDURE
We look at the composition and amount of the debts, income, assets and family circumstances. We tell you whether insolvency is right for you and what it will actually achieve.
We collect the documents evidencing inability to pay: loan agreements, certificates, information on assets and income. You get the list as a single file, with no “just one more thing”.
We check transactions within the suspect period — yours and your spouse's. Gifting a flat to a relative “just in case” is the single most common source of trouble in the procedure.
We prepare the application and the full set of annexes and file them with the arbitrazh court.
The court accepts the application and opens the procedure. From that moment creditors and collection agencies must deal with the financial administrator, not with you.
We negotiate, test whether claims are well founded, object to those brought without justification and, where appropriate, discuss restructuring.
We attend the hearings and conduct all ancillary disputes throughout the case.
We monitor the lawfulness of the sale process and protect assets that are exempt from enforcement. At the end of the procedure the court decides on release from further performance of the obligations.
06 / CONSEQUENCES
Insolvency solves the debt problem but carries consequences set by Article 213.30 of the Insolvency Law. We are obliged to explain them before the engagement is signed.
FOR FIVE YEARS
After the procedure ends you may not take on obligations under loan or credit agreements without disclosing that you have been declared insolvent (art. 213.30(1) of Federal Law No. 127-FZ). Formally, borrowing is not prohibited, but a bank aware of the insolvency may refuse.
FOR FIVE YEARS
You may not file for your own insolvency again. If insolvency proceedings are opened against you on a creditor's application within those five years, the rule on release from obligations does not apply — the debts will not be written off (art. 213.30(2)).
FOR THREE YEARS
You may not hold office in the governing bodies of a legal entity or otherwise take part in managing one. For an insurance company, a non-state pension fund, an investment fund management company or a microfinance company the period is five years; for a credit institution, ten (art. 213.30(3)).
DURING THE PROCEDURE
Control of the assets passes to the financial administrator and bank cards are handed over to him; transactions with property require his consent; the court may temporarily restrict the right to leave the Russian Federation; property other than that protected by Article 446 of the Code of Civil Procedure is included in the insolvency estate and sold at auction, and a share in joint matrimonial property may be sold with the spouse's share paid out.
INSOLVENCY INFORMATION
Is published in the Unified Federal Register of Bankruptcy Information, which anyone may consult, and is entered in the credit history.
DEBTS THAT ARE NOT WRITTEN OFF
Current payments; compensation for harm to life or health; wages and severance pay; compensation for non-pecuniary harm; maintenance; other claims inseparably connected with the person of the creditor; claims for subsidiary liability and for damages caused to a legal entity; compensation for damage to property caused intentionally or by gross negligence (art. 213.28(5), (6)).
THE COURT MAY DECLINE TO DISCHARGE THE DEBTS
If it finds the debtor acted in bad faith: unlawful acts in insolvency, deliberate or fictitious insolvency, concealment of information or the provision of knowingly false information to the court and the financial administrator, obtaining credit on knowingly false information, or concealing or deliberately destroying assets (art. 213.28(4)).
COSTS OTHER THAN LEGAL FEES
The state duty, the financial administrator's remuneration (a fixed RUB 25,000 per procedure, paid into the court deposit, plus the percentage under art. 20.6(17)), compulsory publications, postal and notarial costs.
THE ALTERNATIVE
For debts between RUB 25,000 and RUB 1,000,000, and subject to the conditions of art. 223.2 of Federal Law No. 127-FZ, out-of-court insolvency through a multifunctional public service centre (MFC) is available — free of charge and without going to court. At the first consultation we will check whether that route is open to you.
07 / COST
Payment
The fee depends on the volume of work and the complexity of the matter. We quote it after reviewing your situation at the first consultation — before the engagement is signed — and fix it in the engagement; it does not increase afterwards. This information does not constitute a public offer (art. 437(1) of the Civil Code of the Russian Federation).
Payment by instalments is available for any service, on terms agreed individually. Instalments are provided by Kovalev & Partners LLC on the terms of a commercial credit (art. 823 of the Civil Code of the Russian Federation); the term and the amount of each payment are fixed in the engagement and the payment schedule. Early payment is possible at any time at no extra charge.
Case costs
We give the exact figure at the first consultation, before the engagement is signed; with an engagement the consultation is free. This information does not constitute a public offer (art. 437(1) of the Civil Code of the Russian Federation).
08 / QUESTIONS
The law sets no threshold for applying to court: an application may be filed for any amount where the circumstances clearly show that payment in time will not be possible (art. 213.4(2) of Federal Law No. 127-FZ of 26 October 2002 “On Insolvency (Bankruptcy)”). Where the debt exceeds RUB 500,000 and is more than three months in arrears, filing becomes an obligation (art. 213.4(1)). There is also a free out-of-court procedure through the multifunctional public service centres (MFC) — its conditions are set out in the “Consequences” section above.
The realisation of assets typically takes eight to twelve months from the date the application is accepted; the court may extend it. These are indicative periods and depend on the assets, the number of creditors and any ancillary disputes — over challenges to transactions, for example. The out-of-court procedure through an MFC lasts six months.
Loans, payday loans, debts under promissory notes, taxes, fines and utility arrears are written off. Maintenance, compensation for harm to life or health, wages owed to employees, subsidiary liability and debts arising from fraud or the concealment of assets are not.
A sole home not subject to a mortgage is protected by enforcement immunity (art. 446 of the Civil Procedure Code of the Russian Federation) and is not included in the insolvency estate. Two qualifications are worth knowing in advance: the immunity does not extend to mortgaged housing; and for mortgaged housing a separate settlement or a local restructuring plan may allow the flat to be kept (art. 213.10-1 of Law No. 127-FZ). The court may also refuse to apply the immunity to housing that clearly exceeds a reasonable need, providing replacement accommodation instead (Ruling of the Constitutional Court of the Russian Federation No. 15-P of 26 April 2021).
Besides housing, the debtor keeps ordinary household items, personal belongings and property needed for his or her profession.
Once the court accepts the application, creditors' claims may be brought only within the insolvency proceedings, interest and penalties stop accruing and enforcement proceedings are stayed. We take over dealings with the banks and collection agencies from the first day of our engagement.
Joint matrimonial property may be realised, with the spouse receiving his or her share in money. The spouse's transactions over the past three years are also examined — which is why we review them before the application is filed, not after.
On the number of creditors, the assets involved, any transactions over the past three years and whether creditors are contesting your case. We quote the fee after reviewing the situation at the first consultation — before the engagement is signed — fix it in the engagement, and it does not increase afterwards. Payment by instalments is available for any service, on terms agreed individually. The list of unavoidable case costs is set out in the “What it costs” section above.
Yes. The engagement is signed remotely, documents are accepted electronically, and we stay in touch by telephone, messenger and e-mail. We act for individuals throughout Russia.
Insolvency is not in itself a ground for dismissal. However, for three years after the procedure ends you may not hold office in the governing bodies of a legal entity (Article 213.30(3) of the Insolvency Law); for credit institutions the restriction lasts ten years, and for insurers, pension funds and certain financial organisations five. For five years you must also disclose your insolvency when taking out loans or credit.
We can join the case at any stage: review the file, correct the position, prepare applications and take the matter forward. The earlier we do so, the more options remain.
09 / ENQUIRY
Tell us the total amount of the debt, the list of creditors and what assets you have. That is enough for a first assessment: whether insolvency suits you and how it is likely to end.
With an engagement the review is free.