Insolvency of natural persons: criteria of searching for effectiveness in bankruptcy procedures

The modern state of the development of the national system of natural person’s solvency is ineffective, and the legal procedures having to do with the insolvency of natural persons and natural persons who conduct entrepreneurial activity as representative of small and medium business are to be reformed. Affected by the principles of judgment availability and effectiveness, the national insolvency system requires being brought to conformity with the international standards of the corresponding procedures. The above determines the necessity to reconsider certain provisions of law regulating the procedures of natural person’s bankruptcy to make them conform to modern financial and economic realia. The aim of the article is to define the directions of improving the effectiveness of the procedures of natural person’s insolvency. The research is based on the systemic-structural, hermeneutic and methodological approaches, it uses he comparative-legal method and the methods of synthesis and analysis. The author argues that current legal regulation of natural person’s insolvency does not conform with social and economic factors, does not make it possible to guarantee early restructuring, pre-trial bankruptcy procedures that would correspond the interests of the participants. Application of certain legal norms of procedural law that regulate the rules of natural person’s bankruptcy procedure are analysed in terms of the international standard of access to justice and the requirement of legal certainty. The author analyses and summarises the law enforcement aspects of the out-of-court restructuring of debts on consumer credits and foreign currency credits and considers the prospects of legal regulation of the procedure of meeting the creditors’ demands within insolvency case. The article gives ground for the relevance of implementing early state-guaranteed debt restructuring, out-of-court debt restructuring as a system of measures before starting a procedure in an insolvency case, simplified bankruptcy procedure where lowering the insolvency stigma is to become the main feature, guarantee of access to legal procedures when there is a threat of insolvency, quick and flexible mechanism, reconsideration of the amount of the insolvency officer’s fee, priority of economic rehabilitation.

Doi: 10.31359/jnalsu.29(3).2022.160-180