Personal bankruptcy is not a hindrance to a mortgage – Newspaper Kommersant No. 40 (7485) of 03/10/2023

A draft law has been submitted to the State Duma, which allows, in case of personal bankruptcy, to maintain the only mortgage housing, to conclude a separate agreement with the bank that does not affect other creditors. This will allow not to sell such housing at auction while maintaining the mortgage. Lawyers note that this corrects the balance of interests of creditors and debtors, but also de facto “shifts” the burden of financing part of the loan payments to other creditors, and also opens up scope for debtor abuse.

In bankruptcy law proposed amendments, which create the possibility of approval by the court of a separate settlement agreement or a debt restructuring plan for the only mortgage housing for the sake of its preservation by citizens as part of personal bankruptcy. We recall that it is possible with debts from 500 thousand rubles. and more than three months late. In 2022, according to the Fedresurs, there were 278,000 judicial bankruptcies of citizens with claims amounting to 591.8 billion rubles, of which 49.6 billion rubles were declared by secured creditors (including banks that issued mortgages), 13 .6 billion rubles Now the debtor can keep the property during the restructuring of debts or under a settlement agreement, if they are approved by creditors, otherwise it is sold at auction to pay off debts.

• According to the draft proposed by the United Russia deputies, it is proposed to withdraw the agreement on maintaining the mortgage on the only housing from the bankruptcy case without the consent of the other creditors.
• If housing is already included in the register of claims, the court, having approved the “mortgage” agreement, will exclude it, as well as the possibility of foreclosure on it, but the loan will also remain, which must be repaid (relatives or guarantors will pay such a mortgage at the expense of the citizen’s income after the completion of personal bankruptcy).

Now, as part of bankruptcy, all payments are usually stopped, and after the sale of housing, 80% of the amount is received by the secured lender. The loan obligations are terminated.

The amendments are designed to strengthen the protection of citizens’ right to housing and support the mortgage market against the backdrop of lengthening the terms of such loans and rising default risks (see “Kommersant” dated February 9). The Central Bank and the Ministry of Finance conceptually agree with them, but note the need to study the consequences of non-fulfillment of “mortgage” agreements by the debtor and assess the interest of banks. Sberbank told Kommersant that they supported the idea: “this will allow some debtors to keep their only housing, and banks – working loans.” The Ministry of Economy considers the project “balanced and fair.”

As the first deputy head of the department, Ilya Torosov, explained to Kommersant, the income from the sale of mortgage housing is already allocated on a priority basis to repay the bank’s claims, and the rest of the creditors actually “receive nothing” from these funds – their rights are not violated by the approval of a separate agreement.

“Today, in bankruptcy, the predominance of economic interests over the right of citizens to housing is actually fixed – the project is designed to correct this balance,” says David Kononov, head of the bankruptcy practice at the Lemchik, Krupsky and Partners law firm. According to the head of the Olevinsky, Buyukyan and Partners legal bureau, Eduard Olevinsky, the idea is useful – creditors often motivate to pay off the debt, “using the citizen’s fear of losing their only home”, and the holder of the pledge has no choice but to include the requirements in the register, otherwise the debt to him will just be written off. However, according to the lawyer, it is easier to exclude such a write-off if the pledge is not sold during bankruptcy, so that the bank is not afraid of losing its right to claim.

The arbitration manager Sergey Domnin recalls that now part of the funds from the sale of collateral is directed both to creditors of the first and second priority, and for current expenses associated with the subject of collateral, and the project actually transfers them to unsecured creditors. At the same time, according to him, the project opens “the widest scope for abuse.” For example, a debtor takes out a mortgage and many consumer loans, through which he partially finances it, then goes through bankruptcy, keeping the mortgage, and the rest of the debts are written off. In this regard, David Kononov considers it necessary to find out the source of funds at the expense of which the debt to the bank will be extinguished, and to limit the right to maintain luxurious housing.

Evgenia Kryuchkova, Anna Zanina