How Do I Declare Personal Insolvency?

The personal bankruptcy system originated in the ancient Roman period, and in the Middle Ages, Italy and Britain developed greatly. In 1978, US bankruptcy law included consumer bankruptcy. Personal bankruptcy has become an inseparable part of modern bankruptcy law. ^[1] Personal bankruptcy means that when a natural person who is a debtor cannot pay off its due debts, the court declares it bankrupt according to law, and liquidates and distributes its assets or adjusts debts, exempts its debts, and determines that the parties are in bankruptcy Legal norms of rights and obligations in the process. ^[2]

Personal bankruptcy system

The "The Eighth Session of the Standing Committee of the Sixth National People's Congress on December 2, 1986"

With the rapid development of the market economy,

On October 9, 2019, the Wenzhou Intermediate People's Court and the Pingyang County Court notified China's first case of concentrated liquidation of personal debts with substantial functions of personal bankruptcy and considerable procedures. ^[6]

In the case, Cai, the debtor, was a shareholder of a bankrupt enterprise in Wenzhou. After the effective judgment documents, it was determined that he should bear joint and several liability for the debt of the bankrupt enterprise over 2.14 million yuan. After investigation, Mr. Cai only held 1% of the equity (the actual investment of RMB 5,800) in a certain machinery company in Ruian, where he was employed, and another scrapped motorcycle and scattered deposits. In addition, Cai earns about 4,000 yuan a month from the company and his spouse, Hu Moumou, earns about 4,000 yuan a month. Cai has suffered from high blood pressure and kidney disease for a long time, the medical expenses are huge, and his child is studying at a university. The family has been unable to make ends meet for a long time, and is indeed unable to pay off the huge debt. ^[6]

On August 12, 2019, after the court of Pingyang ruled that the case of Cai's debt consolidation could be accepted, Wenzhou Chengda Certified Public Accountants was appointed as the manager. After the administrator released the announcement of the declaration of creditor's rights and the announcement of the first creditor's meeting, the Pingyang Court presided over the first creditor's meeting on the settlement of Cai's debts on September 24. Mr. Cai solemnly promised to read the "Unfaithful Commitment Letter", with the exception of the property that the manager has identified; if there is any dishonesty, he is willing to bear the legal consequences, and if he causes losses to the creditor, he shall pay compensation according to law responsibility. In the end, Cai proposed a one-time payment plan of 18% over a settlement rate of 1.5%, or 32,000 yuan. At the same time, Cai promised that within six years from the date of the implementation of the plan, if his family's annual income exceeds 120,000 yuan, 50% of the excess will be used to settle the unliquidated debts of all creditors. ^[6]

On September 27, 2019, the Pingyang court issued a behavior restraining order against Cai and terminated the execution of Cai in the case involved in the cleanup. In the end, the case was successfully concluded. ^[6]