ASTANA – Kazakhstan plans to reform its personal bankruptcy laws by 2017 to better help citizens recover from unpayable debts.
“As of today we are working in close rapport with the World Bank and have already developed the concept of bankruptcy of physical bodies. The State Incomes Committee plans to develop concepts for corresponding laws. We consider that by the end of 2017, when all Kazakh citizens will start to declare their income, we will finish them,” Chief Expert of Debt Management Department of State Incomes Committee Meruert Sisembayeva said.
The new law will bring stability in the financial field and help citizens recover from unaffordable debts. The law is expected to benefit debtors and banks.
World practice usually requires a person to prove a failure to pay their debts in court with supporting documents. If the court declares a person bankrupt, an officer is assigned to sell the debtor’s property. Usually the debtor is able to retain their apartment or a house, if it is their primary residence. Other real estate, cars, motorcycles and boats and other luxury items are sold. State decorations and pets cannot be sold as part of the bankruptcy. A debtor is also exempt from fines and forfeits, which are charged during delays in payment. If debt isn’t cleared by the disposition of property, a bank won’t have the right to any further claims on the debtor.
Personal bankruptcy laws were passed in Russia in December 2014, where a bankruptcy petition is accepted by an arbitration court if debts exceed 500,000 roubles (US$7,700).
In Japan, the process of selling a debtor’s property to pay debts is called liquidation. Citizens declaring themselves bankrupt forfeit the right to work as company chiefs, lawyers, notaries, accountants and other positions.
Bankruptcy has a long history and its present procedures are common in all countries. In ancient Rome, defaulting on loans was dangerous for the life and freedom of the debtor. In the medieval period, Italian traders had a bench for clients and if a trader wasn’t able to pay debts, he broke the bench in public, which indicated that he would stop trading. Broken bench is “banka rotta” in Italian.