Viewpoint... On the Chinese path of personal bankruptcy system.

In response to the issue of property enforcement, the Roman law established the "property commission" system, which is also the source of the bankruptcy system. The system changes the way debt is executed, replacing personal execution with property execution, which means that the debtor can avoid personal detention by delivering property. The property is then realized by a person appointed by the creditor in the form of an auction, and the creditor may eventually receive the proceeds of the auction in proportion to the claim. At this point, the end of the twelve copper table law to the debtor's personal security of the cruel way of debt enforcement: if the debtor due to return a certain amount of money, the debtor should be taken into slavery, the debtor can be enslaved, or the debtor as a slave to conduct market transactions, or kill it. In the 13th century, some Italian urban republics followed the Roman law system of property management orders and introduced the bankruptcy system of natural persons. Roman law had some influence on France and Germany, while Japan drafted a commercial code based on German law and incorporated bankruptcy law into it. Although these countries initially pursued merchant bankruptcies, they have improved their bankruptcy systems in response to rising levels of national economic development and improved market structures. In 1922, Japan amended its commercial law to replace the previous merchant bankruptcies with general bankruptcies, and in 1967, France introduced a special law to reform the bankruptcy system, replacing the previous merchant bankruptcies with general bankruptcies.

Bankruptcy, as an economic state, generally means that when the debt is due and cannot be paid off, and the current assets are unable to pay all the debts or the solvency is obviously insufficient, the debt can be liquidated in accordance with legal procedures. From the perspective of facts, the objective state of the debtor facing a debt crisis and unable to repay the debt in time is bankruptcy; from the legal level, when the debtor faces an economic crisis and is difficult to fulfill its debt repayment obligations to all creditors in time by virtue of its own solvency, in order to get rid of this dilemma, the law is used to forcibly change the price of all property and distribute it fairly in accordance with specific procedures, so that all creditors' claims can be satisfied. It can be seen that, in the legal sense, the primary task of bankruptcy is to establish a fair order for the settlement of debts in the special case of the debtor's insolvency.

Scholars have pointed out that the debtor is unable to repay the debt in a timely manner, the court in accordance with the provisions of the law to make a declaration of bankruptcy and property liquidation, fair distribution or reasonable adjustment, through the exemption of debt to clarify the relationship between the parties in the bankruptcy stage of the legal system is personal bankruptcy.

The Enterprise Bankruptcy Law, adopted by China in 2006, applies only to corporate legal persons and does not mention personal bankruptcy.

In view of the problem that the enterprise legal person is unable to repay the debt in time, the assets owned are unable to repay all the debts or the solvency is obviously insufficient, the relevant provisions have been made in China's Enterprise Bankruptcy Law, in which Article 2 states that the debt shall be liquidated in accordance with the provisions of this Law. If an enterprise legal person has the circumstances specified in the preceding paragraph, or has a certain probability of losing its solvency, it may be readjusted in accordance with the provisions of this Law '. It is not difficult to see that the scope of application of the law has certain limitations, only in the case of enterprise legal person independent possession of capacity or property.

The draft bankruptcy law deliberated by the Standing Committee of the National People's Congress expands the applicable objects of the bankruptcy law, pointing out that the bankruptcy law applies to all kinds of enterprises, such as enterprise legal persons and other profit-making organizations set up in accordance with the law. Article 135 of the Enterprise Bankruptcy Law, which provides for sole proprietorships and partnerships, states that the process of applying this Law may be referred to for the liquidation of organizations that do not include enterprise legal persons under other laws. But this does not mean that our country recognizes personal bankruptcy. So far, there is still a lack of provisions on the legal system related to personal bankruptcy in China, and the provisions on this aspect are still in a state of vacancy.

Under the situation that our country further reforms the market economy system and promotes the development of this system, our country's personal business behavior has become more common. As the main body of the market, natural persons engage in different types of production, operation and other acts. The state has implemented various policies to promote the rapid rise of diversified consumer credit loans such as people's consumption and personal housing. In addition, disasters such as earthquakes also occur frequently, leading to rapid deterioration of personal assets. The above situation can easily lead to a situation where individuals are unable to use the assets they own to repay their debts. Under the influence of these factors, the promulgation of China's personal bankruptcy legal system is urgent. Therefore, there is an urgent need to improve the bankruptcy law system in China to provide strong protection for the legitimate rights and interests of creditors, and to provide strong protection for debtors in debt-servicing crisis to enjoy basic living rights and obtain the opportunity to return to social and economic life. At present, in the development and improvement stage of China's bankruptcy legal system, it is urgent for China to include the content of natural person bankruptcy in the bankruptcy law.

The Shenzhen Special Economic Zone was formally established in May 1980. On the 40th anniversary of the establishment of the special economic zone, the Shenzhen Special Economic Zone Personal Bankruptcy Regulations were passed at the General Assembly. This legislation is also an "ice-breaking move" carried out by my country and has important reform significance.

In fact, the construction of the personal bankruptcy system is closely related to the practical needs of Shenzhen. In Shenzhen, many natural persons have recently participated in commercial activities directly in the name of individuals. These natural persons do not include self-employed persons. In addition, there are many commercial entities in the form of e-commerce and other self-employment. Once these commercial entities are exposed to market risk, they are liable for debt in their own name, do not have the same bankruptcy protection as enterprises, and are difficult to exit and regenerate from the market. In addition, risks can also be transferred, in which case individuals and families need to bear business risks and provide a breeding ground for illegal financing channels such as usury.

Based on the urgent needs of reality, the Standing Committee of the Shenzhen Municipal People's Congress closely followed the "five strategic positioning" and "five first" tasks to legislate, and innovatively created a personal bankruptcy system, thereby improving the local market exit mechanism and further improving The current business environment not only stimulates the competitiveness and creativity of commercial entities, but also provides strategies to avoid financial risks.

On December 2, 2020, the Higher People's Court of Zhejiang Province issued the Guidelines for the Centralized Liquidation of Personal Debts (Class Personal Bankruptcy) of Zhejiang Courts (Trial) (hereinafter referred to as the "Guidelines"). The Wenzhou Intermediate People's Court issued a document in 2019, which states that the meaning of debt concentration can be understood in the following way: within the current legal framework, in accordance with the enforcement system and theory such as enforcement settlement, based on in-depth property investigation and liquidation in accordance with the principle of personal bankruptcy, through enforcement settlement or joint action, to generate a personal debt repayment plan to effectively exit the enforcement procedure and repair the debtor's credit.

It is reported that the "Guidelines" contain a total of 61 articles, which are composed of 11 parts such as "jurisdiction" and "debt liquidation". Its goal is to establish a set of differentiation mechanisms, and adopt plans such as administrator investigation and verification to divide debtors into two types. One is a debtor who "has the ability to fulfill debt repayment obligations but refuses to perform their obligations, the other is an" honest and unfortunate "debtor who wants to meet its debt service obligations but has insufficient existing assets to meet their obligations, providing a more lenient regime for the latter subject to enforcement of the former. The operation of the system is based on the "good faith" of the debtor, and if the debtor's conduct violates the principle of good faith, centralized liquidation proceedings should not be initiated or terminated as soon as possible after commencement.

The process established by the Guidelines closely links the personal bankruptcy system with the enforcement system, introduces the administrator system in the enforcement procedure, or returns the system of property declaration to the standard. Through the centralized liquidation of personal debts, the enforcement system is promoted to return to its standard, thus distinguishing the scope of application of the two systems: the enforcement system is applied to the parties who "have the ability to perform their obligations but refuse to perform their obligations"; For "honest and unfortunate" debtors, the centralized liquidation system of personal debts is applied to extricate themselves from the chain of debts. The bankruptcy legal system is a basic system of the socialist market economy legal system and an infrastructure of the market economy system.

Different from corporate bankruptcy, personal bankruptcy often has a negative impact on the creditor's family, causing the whole family to be threatened by the economic crisis. When setting up a reasonable threshold for individuals to apply for bankruptcy, out of the consideration of China's personal credit supervision system and personal property registration system, in order to prevent illegal personnel from applying for personal bankruptcy in order to avoid debts, and to provide a psychological buffer stage for the masses, so that the public gradually accept the concept of personal bankruptcy, the threshold for bankruptcy filings set by legislatures tends to be high.

According to the general principle of bankruptcy law, both the debtor and the creditor have the right to apply to the court for bankruptcy. The personal bankruptcy law should make strict provisions on the conditions of personal bankruptcy application to avoid the situation of creditor's arbitrary application and excessive use of personal bankruptcy to evade debts.

(1) First of all, in the case of the bankruptcy subject has full civil capacity, in the implementation of any kind of civil legal act, the civil subject should have this necessary condition. Obviously, the civil act of personal bankruptcy filing is also suitable for the application of this prerequisite. For debtors with full civil capacity at the debt formation stage, who lack such capacity or are restricted after the debt is formed, their guardians or their custodians may file for bankruptcy on their behalf on the basis that they can prove that the debtor lacks such capacity or is restricted. (2) If there is conclusive evidence that the insolvent entity has lost its ability to repay the valid debts due in accordance with the contract and is unable to restore its ability to repay the debt within a relatively short period of time, the creditor shall meet the following conditions when filing an application for bankruptcy:( 1) the creditor has full civil capacity. By the same token, the guardian or custodian of a debtor who has full civil capacity at the stage of the formation of the claim and then lacks such capacity or limited capacity may file for bankruptcy on its behalf if it can be established that the creditor lacks such capacity or limited capacity. (2) The debt has reached the date agreed in advance for repayment, and the debtor still fails to meet its obligation to repay the debt within a reasonable time after the creditor requests the debtor to repay the debt.

1, priority application of summary procedures.

The relationship between creditor's rights and debts in personal bankruptcy cases is relatively simple and does not involve more creditors. The application of simplified judicial procedures helps to avoid the waste of judicial resources. If some cases involve a large number of creditors and the amount of claims is large, general insolvency proceedings may be applied in cases where the relationship is more complex.

2. Establish pre-procedure

Individual bankruptcy cases can be effectively selected through the setting of pre-procedure. At the practical stage, an attempt can be made to establish a settlement procedure out of court or in court, and the bankruptcy trial procedure can be initiated after the settlement is invalid, so that creditors can be fully informed and the trial can help reduce pressure. In addition, it can make the settlement agreement more effective.

(IV) Bankruptcy Exemption

The insolvency exemption system is mainly for natural persons whose insolvency proceedings have been concluded, and for the debts that have not yet been repaid by the bankrupt, the debtor is not liable for continuing to repay the debts under arbitrary circumstances, in accordance with the provisions of the system. The exemption system should make detailed provisions on the applicable conditions of the system and the scope of exemption. Among them, the provisions that cannot be exempted from liability should be taken as the core content. With reference to the special circumstances of our country and the advanced legislative experience of other countries, and out of consideration of social morality, the following situations should not be included in the scope of exemption: 1. debts arising from the damage to the personal rights of others; 2. debts arising from the malicious acts of the bankrupt; 3. alimony expenses borne by the corresponding dependants, alimony expenses borne by the corresponding dependants, and alimony expenses borne by the corresponding dependants; 4. The interval between the exemption from the previous bankruptcy does not conform to the time prescribed by law and does not have the obligation of the subject matter prescribed by law.