The new law will apply to bankruptcy cases that were initiated after the entry into force of the law, as well as cases that were initiated before its entry, if the debtor’s only mortgage housing has not yet been sold at auction
Russian President Vladimir Putin has signed a law that allows not to withdraw the only housing taken out on a mortgage from a citizen undergoing bankruptcy proceedings. The relevant law has been published on the official portal of legal information.
Amendments are being made to the law “On Insolvency (Bankruptcy)”. The adopted law allows a citizen to conclude a settlement agreement with a mortgage lender in an arbitration court as part of his bankruptcy case. At the same time, the consent of other creditors and the financial manager is not required. As part of the agreement, a mortgage debt restructuring plan may be drawn up. A third person (for example, relatives) or the citizen himself can pay the loan “at the expense of his income, which cannot be levied in accordance with the legislation of Russia on enforcement proceedings and (or) income that can be received by him after completion of the procedures applied in the bankruptcy case of a citizen.” Thus, the only mortgage housing will not be sent to auction as part of the bankruptcy case.
According to current legislation, it is possible to recover the only mortgage housing or the land plot on which it is located, provided that the loan obligations are not fulfilled, as a result of which the delay accumulates.
The authors of the adopted law noted that situations often arise when the debtor has no overdue mortgage debt, but there are unpaid debts to other creditors. When considering personal bankruptcy cases, the borrower was deprived of his only home, even with proper fulfillment of mortgage obligations. Such judicial practice, according to the authors of the amendments, called into question the constitutional (state) guarantees in the field of housing provision for citizens. The document was approved by the State Duma in late July and approved by the Federation Council in early August.
The law will enter into force 30 days after the date of its official publication. The document explains that the provisions of the new law will apply to bankruptcy cases that were initiated after the entry into force of the law, as well as cases that were initiated before its entry, if the debtor’s only mortgage housing has not yet been sold at auction.
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