During its plenary meeting on Wednesday, the State Duma adopted a bill on the bankruptcy of individuals in the first reading.

During the discussion of the bill, State Duma chairman Mr. Naryshkin stated that currently the total volume of debts owed by Russian citizens amounts to approx. 7 billion rubles ($220.64 million).

“The process of bankruptcy of individuals, unlike legal entities, is not regulated by the law. This bill closes the deficiency of the law and should substantially reduce the social tension in this regard, because often individuals who are not able to pay their debts find themselves in difficult situations and this pushes them to commit reckless actions,” he said.

The bill states that a citizen who finds himself in financial pressure can submit a bankruptcy statement to the court. The court may then grant the individual the right to pay the debt in installments for a term of up to five years.

An individual with debts exceeding 50,000 rubles ($1,576) and whose arrears amount to three months can be declared bankrupt. In this case, the individual cannot apply for a bank loan without citing his bankruptcy for the five years after declaring his bankruptcy status.

The bill also prohibits declaring oneself bankrupt more than once in five years.

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