Grounds for initiating proceedings in the case of insolvency of an individual

Abstract

The article specifies the grounds for initiating proceedings in the case of insolvency of an individual on the basis of a comprehensive comparative analysis of foreign experience, scientific literature, national legislation and practice of its application. Based on the analysis of the legislation and case law, it is noted that the Bankruptcy Code does not clearly define the term "threat of insolvency". Article 115 of the Code states that the threat of insolvency includes circumstances that confirm that in the near future the debtor will not be able to meet its monetary obligations or make normal current payments. It is argued that the lack of definition of "threat of insolvency" in the Code is a shortcoming of current legislation, and therefore this rule needs to be clarified in terms of confirming the inability of the debtor to meet financial obligations, the terms of default. It is proposed to define "threat of insolvency" as a set of documented legal grounds that indicate the inability of the debtor to meet its own financial obligations or make regular financial payments over the next two months. The expediency of determining in Article 115 of the Bankruptcy Procedure Code an exclusive list of grounds for initiating insolvency proceedings against an individual is argued. Consolidation in Art. 115 of the Code of the inexhaustible list complicates law enforcement as provides a possibility of application of norms of other regulatory legal acts; provides wide discretion to the court, which creates conditions for the abuse of procedural rights for both participants in the bankruptcy proceedings and judges. The peculiarities of initiating proceedings to restore the solvency of an individual are specified: only the debtor himself may apply to the court to declare an individual insolvent. In order to reduce the financial burden on an insolvent individual in the implementation of bankruptcy proceedings, it is proposed to give the creditor the right to initiate legal proceedings for the insolvency of such a person.