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7 Oct, 2023 07:57

Russian bankruptcies surge past million mark – RBK

The rising numbers have been reportedly facilitated by the laws protecting the rights of debtors
Russian bankruptcies surge past million mark – RBK

More than one million Russians have been declared financially insolvent by courts in the eight years since the launch of the judicial bankruptcy procedure in the country in 2015, business outlet RBK reported on Friday, citing official statistics.

Data showed that since the start of 2023, almost 250,000 debtors have undergone the process, jumping 28.8% year-on-year.

At the same time, the growth of bankruptcy procedures is slowing down, the report indicated. In 2020, the number of financially insolvent Russians increased by 72.6%, while in 2021 and 2022, it was by 62% and 44.2%, respectively.

Experts told RBK that the number of people planning to resort to the judicial bankruptcy procedure is expected to continue to rise, as facilitated by new laws protecting debtors’ rights.

In August, Russian President Vladimir Putin signed a law that allows more people to take advantage of a simplified bankruptcy procedure. According to the adopted provisions, the amount of debt must be at least 25,000 rubles ($250) but no more than $10,000 for an individual to be declared bankrupt. Previously, the range was from $500 to $5,000.

An out-of-court bankruptcy procedure has also become available to pensioners and recipients of monthly parental benefits. In addition, the law proposes reducing the period in which a person can initiate extrajudicial bankruptcy again from ten to five years.

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