Bankruptcy of IP: reasons, features and order of implementation

Bankruptcy and liquidation of the enterprise are a complex and painful process. It is aimed not only at returning part of the debts to its employees and creditors, but also to enable the organization to continue its activities, despite the unfavorable circumstances.

At the same time, if we have become accustomed to the insolvency of legal entities for the last twenty years, the bankruptcy of the IP still raises certain questions. This process has its own specific features and nuances.

First of all, it should be noted that any individual entrepreneur is considered primarily as a citizen of Russia, therefore provisions on the bankruptcy of Russian citizens are quite applicable to him. However, the legal conflict lies in the fact that the bankruptcy of a citizen in the territorial boundaries of the Russian Federation has not yet been detailed by any law. Therefore, IPs are the only category of individuals in the Russian Federation at the moment, for which an insolvency proceeding may be initiated.

Bankruptcy IP begins with the submission of an application for its insolvency in the arbitration court. This application can be submitted either by the debtor himself or by one of his creditors, who himself is a subject of entrepreneurial activity. At the same time, in the course of the judicial process, an application can be submitted by persons whose claims are related to their personal relations with the entrepreneur.

After considering all the circumstances of this case, the arbitral tribunal shall decide on the legality of initiating this procedure for a citizen. Bankruptcy IP becomes a legal fact. After that, its state registration on the right to engage in entrepreneurial activity automatically ceases to operate, and all licenses and certificates cease to exist. According to the general rules of the Russian legislation, the ban on the re-creation of IP by this citizen is valid for a year after the decision of the arbitration court became a legal fact.

A significant difference between the process of bankruptcy of IP from similar measures applied to legal entities is that it can not be applied to such procedures as surveillance, external management and financial recovery. However, if the bankruptcy of an entrepreneur is initiated by the entrepreneur himself, he can attach to his application a specific plan for the gradual reduction of his debts.

After the arbitration court has decided to recognize the entrepreneur as bankrupt, fines and penalties are no longer imposed on him, he can not be afraid for the fact that creditors will also insistently apply to him so that he can repay the debt to them. True, this does not apply to the obligation of an entrepreneur to pay maintenance for the maintenance of his children or an ex-spouse, if such a court decision has already entered into legal force.

In order to pay off debts to their creditors, the entrepreneur will have to facilitate the sale of the property, which, according to the court decision, is included in the bankruptcy estate. In this case, the order of satisfaction of requirements is determined by law.