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Slow start for personal bankruptcy in Russia

posted by Jason Kilborn

After focusing on the substance of personal bankruptcy laws around the world for years, I'm now convinced that I should instead have been focusing on institutions and procedure. Reports of the first year of the Russian personal bankruptcy process convince me further. In a paper anticipating the new law, I predicted potential process hangups, but I badly underestimated the degree to which procedural complications would waste time and resources and undermine the system's new effectiveness. I plan to look more closely at this in the future, but for now, one statistic reported in the press tells it all: In the first full year of the new Russian law's effectiveness, of the 33,000 individual bankruptcy petitions filed, only about 15,000 have been admitted into the procedure, and of these, only about 500 have been fully processed. Debtors' errors in filling out the new paperwork doubtless contributed to this slow start, but I suspect the courts are just not embracing the new process yet, and admitted cases are being drowned in a swamp of pointless procedural formalities. A simplified procedure for these individual cases is being discussed already, but why couldn't this lesson have been learned at the outset? There is simply no need in the personal bankruptcy context for complex procedures designed for high-asset business cases. Decades of experience elsewhere have proven this time and again. And once again we see, as Margaret Howard observed in one of my favorite articles years ago, lighthouse still no good.

Comments

hi i think this thing impact on economy of the country. so hope things become good day by day.

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