Lawyer Pavel PetrovLawyer Pavel Petrov

RURU ENEN

Refusal to Declare a Debtor Bankrupt in Russia

In briefRefusal to declare a debtor bankrupt means the court did not establish the statutory grounds or another specific refusal ground applies. For a company, Article 55 of Law No. 127-FZ expressly provides a judgment refusing bankruptcy where the signs of insolvency are absent. For an individual, the court uses a different formula at the petition review: the application is declared unfounded and left without consideration or the proceedings are terminated.

Not a technical return

The court decides substantive grounds, not merely document completeness.

Debtor status matters

Companies and individuals receive different forms of judicial act.

Evidence required

Payment, solvency and qualifying debt must be documented.

When corporate bankruptcy is refused

Article 55 provides for refusal where the Article 3 signs of insolvency are absent and in other cases expressly stated by law. The court tests the qualifying principal debt, default period, claim status and evidence of ability to pay.

Penalties and financial sanctions cannot artificially create the statutory signs; see the guide to penalties in Russian bankruptcy.

SituationJudicial actEffect
No signs of corporate insolvencyJudgment refusing bankruptcyThe debtor is not declared bankrupt on that petition
Individual petition unfounded; another petition pendingLeft without considerationThe court moves to the next petitioner
Individual petition unfounded; no other petitionProceedings terminatedThe current case ends
Formal defects before reviewStayed for correction or returnedInsolvency merits have not been decided

Reviewing an individual petition

Article 213.6 requires proof of insolvency. A creditor petition must also establish a qualifying, unpaid claim and comply with Articles 213.3 and 213.5. If unfounded, the presence of another bankruptcy petition determines whether the application is left without consideration or the proceedings terminate.

This differs from the broader guide to termination of an existing individual bankruptcy case, which covers additional grounds.

Important evidence

  1. Judgments and documents proving qualifying principal debt.
  2. Payments, set-offs or other satisfaction before the hearing.
  3. Due date and duration of default.
  4. Assets, income and available liquidity.
  5. Objections to amount and composition of the claim.
  6. Evidence of petitioner bad faith where alleged.
Payment after filing needs separate analysis. It may affect merits and costs, but the result depends on timing, other petitioners and the procedure.

After refusal

The judicial act may be appealed within the applicable procedural period. The appeal should identify the actual error: calculation of insolvency signs, assessment of evidence, claim classification or the form of judicial act. Refiling without correcting the refusal ground creates further cost.

Frequently asked questions

Does refusal mean there is no debt?

No. It means bankruptcy grounds were not established in that proceeding; the debt may remain enforceable elsewhere.

Can a petition be filed again?

That depends on the refusal ground and new circumstances. An unchanged repeat may be ineffective.

Does payment before the hearing always end the case?

No. Other petitioners, the unpaid balance and special statutory rules must be considered.

Is return of a petition a bankruptcy refusal?

No. Return normally concerns procedural barriers before substantive review.

Official sources

Need to assess refusal risk?

We can review the claim, insolvency signs and evidence before the hearing without guaranteeing the outcome.

Initial consultation