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"this court believes that the debtors guo and li meet the conditions for bankruptcy... in accordance with article 84 of the shenzhen special economic zone personal bankruptcy regulations, the following ruling is made: declare the debtors guo and li bankrupt." on august 29, a judge of the shenzhen intermediate people's court served a ruling to the debtors guo and li. this is the first time that the shenzhen intermediate people's court has ruled to declare a couple bankrupt.

declaring a debtor bankrupt is a legal procedure for personal bankruptcy liquidation and the beginning of the debtor's exemption probation period. after the expiration of the probation period, the debtors guo and li can apply to the court for exemption of their unpaid debts. whether to exempt their unpaid debts shall be reviewed and determined by the people's court in accordance with the law.

meet the conditions for bankruptcy

guo and li are a married couple. since 1998, guo and li have opened a towel wholesale and retail store in luohu district, shenzhen. in 2009, the towel store warehouse suffered a fire, and about 1.5 million yuan of inventory was burned. the couple filed arbitration and lawsuits with the store lessor and the property company for compensation for the loss of goods, but both lost the case and the store was no longer in operation. in 2012, the couple reopened the store with a monthly rent of more than 10,000 yuan, but the business was poor and it has been in a loss-making state.

from 2012 to 2023, the couple borrowed money from relatives, friends, various platforms and banks to repay debts and maintain the store operation... unable to pay the store rent, the store had to be closed and cancelled in october 2023. the couple's total debt is more than 9.28 million yuan.

after guo and li applied to the court for personal bankruptcy liquidation, the shenzhen intermediate people's court ruled to accept the application on may 31, 2024, and designated a law firm to serve as the bankruptcy administrator for the two.

the bankruptcy administrator found that guo currently has no job and no income, and is in the recovery stage after coronary stent surgery; li has retired and can receive a monthly pension of more than 4,000 yuan, and the two have no other income. the couple owns a property in luohu district, shenzhen, with a construction area of ​​114.39 square meters, and the two have no other large assets. guo and li have less than 400 yuan in cash and deposits. the close relatives living with guo and li include two sons and guo's mother. the eldest son has a fourth-level intellectual disability; the younger son is still studying at university; li is at home taking care of the eldest son and guo's mother. the bankruptcy administrator believes that the bankruptcy facts stated by guo and li and the information they reported are true, and there is no transfer of property, evasion of debts, false statements, etc., which meets the conditions for personal bankruptcy liquidation stipulated in the "regulations on personal bankruptcy in shenzhen special economic zone".

the shenzhen intermediate court held that the debtors guo and li met the conditions for bankruptcy and should rule to declare guo and li bankrupt. the debtor's property disposal plan shows that after the court declares guo and li bankrupt, the administrator will promptly take over a property in luohu district, shenzhen, owned by the two, and dispose of the property through online auction, with the proceeds used to repay debts according to the distribution plan.

the probation period for exemption of the debtor's outstanding debts is three years from the date on which the court declares the debtor bankrupt. during the probation period, the debtors guo and li shall continue to perform the obligations stipulated in the restrictive behavior decision made by the people's court and other obligations of the debtor stipulated in the "regulations on personal bankruptcy in shenzhen special economic zone". during the probation period, guo and li can reserve a certain amount of living expenses and medical expenses for the two of them and their dependents every month from their income. the amount of their income that exceeds this amount or the newly discovered bankruptcy property shall be taken over and distributed by the administrator. after the expiration of the probation period, the debtors guo and li may apply to the court for exemption of outstanding debts. whether to exempt their outstanding debts shall be reviewed and determined by the people's court in accordance with the law.

personal bankruptcy is not a way to escape debt

it is natural to pay back debts, but in reality, there are some honest but unfortunate people who find it difficult to pay off their debts and are stuck in debt for a long time.

the first personal bankruptcy law in my country, the shenzhen special economic zone personal bankruptcy regulations, which was reviewed and approved by the shenzhen municipal people's congress standing committee, will come into effect on march 1, 2021. the regulations stipulate that personal bankruptcy procedures include three types: personal bankruptcy liquidation, reorganization, and reconciliation procedures.

shenzhen citizen liang moumou chose to start a business in the bluetooth headset market in 2018, but he has been unable to obtain stable customer resources. coupled with the impact of the covid-19 pandemic, his bank debts have increased and he is unable to repay all debts. in march 2021, liang moumou applied for personal bankruptcy to the shenzhen intermediate people's court, and in may 2021, the shenzhen intermediate people's court accepted the application.

the court found out that liang moumou declared a personal debt of about 750,000 yuan, and interest accrued on the day the court accepted the personal bankruptcy application. after liang moumou's business failed, he worked as a structural engineer in a company with a monthly income of about 20,000 yuan, and had a strong willingness to repay his debts. the court agreed that liang moumou should apply the reorganization procedure and negotiate with creditors to formulate an installment repayment plan. according to the reorganization plan that the court ruled to take effect, in the next three years, except for 7,000 yuan per month for basic living and some production and living necessities as exempted property, all other income of liang moumou and his wife will be used to repay debts. if liang moumou fails to implement the reorganization plan, the creditors have the right to apply to the court for bankruptcy liquidation. in july 2021, the shenzhen intermediate people's court approved liang moumou's personal bankruptcy reorganization plan.

liang worked diligently and actively repaid his debts. in april 2023, the 21st month of the implementation of the reorganization plan, he finally repaid all the principal of the claims. this time was 15 months ahead of the requirements of the reorganization plan. in june 2023, the shenzhen bankruptcy court served a civil ruling on liang, ruling that the case had been executed and exempting him from the unpaid debts within the scope of the reorganization plan in accordance with the law.

at that time, the lead lawyer for the administrator of the country's first personal bankruptcy case said that if the calculation was not stopped, it was estimated that more than 300,000 yuan in interest would be generated.

since the implementation of the "shenzhen special economic zone personal bankruptcy regulations", as of june 2023, the shenzhen intermediate people's court has received a total of 1,635 personal bankruptcy applications, 411 of which have been filed for review, and 117 bankruptcy applications have been accepted. as of the end of august this year, the shenzhen intermediate people's court has accepted more than 350 personal bankruptcy cases.

similar situations are not only happening in shenzhen. on december 2, 2021, the nanjing intermediate people's court issued the "implementation opinions on carrying out the pilot work of economic rebirth of honest executors". it is reported that this pilot work has very high requirements and examinations for honesty. if the debtor wants to evade debts by transferring or hiding property, he cannot withstand the procedural review, and the review will make this person a transparent person. some people are unwilling to be transparent, and they cannot withstand transparent scrutiny.

will someone use the personal bankruptcy system to evade debts? according to yangcheng evening news, cao qixuan, president of the shenzhen bankruptcy court of the shenzhen intermediate people's court, said that in response to social concerns, the shenzhen special economic zone personal bankruptcy regulations were strictly designed to prevent debt evasion at the beginning of their formulation, such as stipulating that applicants should strictly fulfill their good faith obligations, establish a personal bankruptcy information registration and disclosure system, etc. at the same time, the courts established rules and regulations and carefully checked the trial work. existing cases have proved that attempts to evade debts have been "rejected" by layers of checkpoints.

wang said that her annual income is about 200,000 yuan and she keeps pets. "my boyfriend and i are both fans of electronic products. when we were shopping for home appliances, we chose more expensive products, spending more than 330,000 yuan on them." wang's debt principal and interest is about 989,000 yuan. when he applies for personal bankruptcy reorganization, he plans to repay 100% of the principal, totaling more than 880,000 yuan.

"she continued to spend lavishly after becoming indebted. she applied for reorganization and proposed to repay the entire loan principal, but we did not agree. what will society think of this individual's excessive consumption and demand for interest reduction?" in cao qixuan's view, the handling of personal bankruptcy cases must fully consider the issue of "interest balance" and pursue the organic unity of political, social and legal effects, "none of which can be missing."

editor|lu xiangyong yi qijiang

proofreading|duan lian

daily economic news is compiled from yangcheng evening news, shenzhen bankruptcy affairs management office, shenzhen satellite tv shenshi news

daily economic news