On 17 May 2022, the Shenzhen Bankruptcy Tribunal issued the “Opinions on Enhancing Individual Bankruptcy Filings and Reviews” (《加强个人破产申请与审查工作的实施意见》, hereinafter referred to as the “Opinions”) to prevent misuse of personal bankruptcy.
The Opinions aims to “close the loopholes of the personal bankruptcy system” and ensure that “the door to debt relief through personal bankruptcy is open only to honest and unfortunate debtors.”
According to the Opinions, debtors must fully and truthfully declare the reasons for personal debts, household income level, current property status, and other necessary information to the court, and accept inquiries from the court and verification by creditors, so as to prove their “honesty” and “misfortune” with objective evidence.
If the applicant for personal bankruptcy provides false or falsified materials, declares inaccurate information, or makes false or misleading statements, thus causing people’s courts to render a judgment, the applicant shall bear corresponding legal liabilities.
So far, Shenzhen is the first and only place in China to establish a personal bankruptcy system, so it can be said that this city is incubator for exploring the personal bankruptcy system in China.
Cover Photo by Darmau Lee on Unsplash