"The bankruptcy of the citizen: restrictions on exemption of debts" — article of Oleg Ganyushin for Arbitration disputes

October 1, 2017 was two years since the entry into force of the provisions of the Federal law of 26.10.02 № 127-FZ "On insolvency (bankruptcy)" (hereinafter — The bankruptcy law) concerning the bankruptcy of citizens. And if in 2015 the legal community tried to foresee potential problems and conflicts awaiting law enforcement practice in connection with the introduction of this institution, now the practical material already developed by the courts on the most urgent issues can be systematized and analyzed.

What did the legislator suggest and what is the problem?

Without aiming to cover all the problems, let us turn to one of them — very relevant from the point of view of the purposes of bankruptcy — the interpretation of the rules on limitation of debt relief (paragraph 4 of article 213.28 of The bankruptcy law).

Even at the stage of discussion of the draft law, the provision that, in the presence of certain circumstances, the debtor is not exempt from debts at the end of the bankruptcy process, aroused great interest.

The actual completion of the insolvency procedure by retaining the debt owed to the individual is obviously not a typical result. The prohibition on debt relief in certain circumstances is an exception that fundamentally changes expectations of both the debtor and the creditors. Therefore, the reasons for the application of this institution must be understood in accordance with the literal text of the law, without allowing an extensive interpretation.

However, the complexity lies in the diversity of the problem and the imperfection of the legal technique, when it is difficult to find an unambiguous, concrete and exhaustive formulation (if at all possible, given that any rule of law is a standard generalized rule that needs to be interpreted in the context of specific circumstances).

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