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Novation in Russian Bankruptcy: Original Debt, Security and Risks

Short answerNovation replaces an existing obligation with a new one between the same parties, but it does not erase the debt’s economic history for bankruptcy purposes. Merely changing an amount, term or schedule is not novation. Clear intent, a new subject or legal basis, security consequences and creditor impact must be established.
01

Clear replacement

The agreement must show that the old obligation ends and only the new one remains.

02

Ancillary rights change

Security and sanctions generally end unless preserved by agreement or law.

03

Substance prevails

A new document does not guarantee a new debt date or safer priority.

Novation or another arrangement

StructureEffectKey indicator
NovationOld obligation is replacedNew subject or basis and clear termination intent
AmendmentThe same obligation continuesOnly term, amount or performance order changes
Accord and satisfactionObligation ends upon alternative performanceTermination depends on actual transfer
Debt acknowledgmentExisting debt is confirmedNo new subject or basis

Civil Code Article 414 requires an agreement replacing the obligation. Supreme Court Plenum Resolution No. 6 explains that changing amount or timing alone is insufficient. Where novation and accord are disputed, the agreement’s substance and termination moment control.

Novation does not reset risk. Bankruptcy review reaches the original transaction, debt reality, equivalence, party knowledge and possible creditor preference.

Review workflow

Reconstruct the original debt

Prove the contract, performance, amount and original accrual date.

Read the replacement agreement

Identify clear termination intent, the new subject or basis and effective conditions.

Review security

Determine whether pledge, suretyship, penalties and other ancillary rights were preserved.

Measure bankruptcy impact

Compare amount, maturity, priority and security before and after the transaction.

Documents

  • original contract and performance evidence;
  • novation agreement and correspondence;
  • debt calculations before and after replacement;
  • pledge, surety and other security documents;
  • accounting records and reconciliations;
  • bankruptcy orders and publications.

FAQ

Is extending maturity a novation?

Not by itself; without a new subject or basis it is normally an amendment.

Does security survive?

Ancillary obligations generally end unless the agreement or law preserves them.

Does a late novation create a current claim?

Not automatically; origin and economic substance matter beyond the new document date.

Can novation be avoided?

Yes under ordinary or bankruptcy-specific grounds, including creditor harm or preference.

Official sources

Related guides: set-off, security deposits and creditor-register filing.

Need to determine how novation affects a claim?

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