The insolvency proceedings of a natural person shall consist successively of the bankruptcy proceedings and the discharge procedure. In the context of the bankruptcy proceedings, all the debtor's property shall be disposed of and the funds derived from its disposal shall be diverted to the satisfaction of creditors' claims, with the exception of the property specified in the Civil Procedure Law, to which recovery cannot be directed. Within the framework of the discharge procedure, the debtor's income is transferred to the satisfaction of creditors' claims and, after the expiry of the discharge procedure, the obligations not covered under this procedure are extinguished.
The bankruptcy proceedings shall take place until the entire debtor's property is sold, with the exception of the property to which recovery may not be directed. The legislature has determined that the debtor's property must be sold within six months.
During the bankruptcy proceedings, the debtor has an obligation to:
- to generate income according to their own possibilities in order to meet creditors' claims more fully; *
- within a period of not later than 10 days following the date of the declaration of the insolvency proceedings of a natural person, to transfer his or her funds to the administrator;
- to store and manage his property as a good and careful master;
- to prepare a plan for the settlement of liabilities;
- provide the administrator with the necessary information for the conduct of insolvency proceedings;
- to cover the costs of the insolvency proceedings of a natural person;
- at the request of the administrator, transfer his or her property to the management of the administrator, with the exception of the property to which recovery cannot be directed, and the property referred to in Section 140 (2) of the Law on Insolvency (which is essential for obtaining income), as well as the property belonging to third parties in the possession or possession of the debtor.
The debtor has the following rights:
- receive at least two-thirds of their income in order to cover the costs of the maintenance of a natural person;
- keep the property he needs to make an income.
*in insolvency proceedings initiated by 28 February 2015, the debtor shall remain obliged to transfer one-third of his income to the account opened by the administrator in the credit institution.
The sale of the debtor's property shall be ensured by the administrator, following a plan for the sale of the property. The administrator shall commence the sale of the property not earlier than two months after the declaration of the insolvency proceedings of the natural person.
The debtor's assets are first fully covered by maintenance payments (maintenance payment debts), including payments to the Support Guarantee Fund, as well as the costs of the insolvency proceedings of a natural person.
Funds derived from the sale of the debtor's property serving as collateral shall be transferred to cover the secured creditor's claim. Claims of unsecured creditors are merged into a single group without priorities. The claims of unsecured creditors are satisfied in proportion to the amount of each creditor's basic debt. The claims of unsecured creditors (proportional to the amount due to each creditor) shall be satisfied from the debtor's funds which remain over after the satisfaction of the claims of the unsecured creditors of the basic debt. The debtor's funds remaining in excess of the costs of the insolvency proceedings referred to in this Article and the satisfaction of creditors' claims shall be transferred to the debtor.