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Debt Restructuring in Russian Personal Bankruptcy: Plan, Term and Procedure

In briefA Russian personal bankruptcy restructuring plan is not a private arrangement with one bank. It is a document within the bankruptcy case that sets proportional payment terms for known insolvency creditors and the authorized public body. The debtor, a creditor or the public body may propose it; creditors review it and the commercial court makes the final approval decision.

Income required

The individual must have an income source when the plan is proposed.

Up to five years

The general maximum; a court-imposed plan under the special exception is limited to three years.

Court approval

A creditor vote matters but does not replace judicial review.

Who can use restructuring

Article 213.13 of Federal Law No. 127-FZ requires an income source and imposes further eligibility conditions, including limits connected with recent bankruptcy and a previously approved plan. Formal income is not enough: the payment schedule must be economically feasible and preserve basic living funds for the debtor and dependants.

IssueWhat is reviewedFailure risk
IncomeStability, evidence and projection for the plan termPayments exist only on paper
Family expensesSubsistence minimum, dependants and essential needsThe plan deprives the family of basic funds
CreditorsAll known insolvency claims and the public bodySelective payment or a concealed creditor
AssetsPlan return compared with immediate realizationCreditors receive materially less
DisclosureIncome, assets, liability history and prior proceduresFalse or incomplete information

Who may propose a draft

Under Article 213.12, the individual, an insolvency creditor or the authorized public body may submit a draft. It is delivered to the financial manager and the participants under the statutory procedure. Multiple drafts are presented to the creditors’ meeting. If no draft is received, the meeting considers asset realization.

What the plan must contain

Article 213.14 requires the order and timing of proportional cash payments to all known insolvency creditors and the authorized public body. The plan must also regulate notice of a material change in the debtor’s financial position. Certain personal claims listed by law are excluded.

  • participants and claim amounts;
  • income sources and term projections;
  • payment dates and distribution method;
  • funds retained for the debtor and dependants;
  • asset treatment and comparison with realization;
  • notice of material financial changes.
The maximum is not an automatic five-year term. The court reviews the actual schedule. A plan approved under the special rule despite a negative creditors’ vote cannot exceed three years.

How long debt restructuring may last

A plan may run for no more than five years. If the court approves a plan that was not approved by the creditors’ meeting, the statutory maximum is three years. These are ceilings, not promised durations: the schedule depends on verified income, the claims and the amount the debtor can realistically pay while retaining necessary living expenses for the household.

Approval sequence

  1. Claims are registered and the manager reviews the debtor’s finances.
  2. The draft is sent to participants and access details are published.
  3. The creditors’ meeting debates and votes on the draft.
  4. The manager files the report, financial data and meeting minutes.
  5. The court approves, allows revision or refuses and considers asset realization.
  6. The debtor performs the approved schedule under supervision.

Approval without unanimous consent

A negative vote is not always final. Article 213.17(4) permits approval under strict conditions where secured claims are fully covered and other creditors receive materially more than under immediate asset realization and six months of average income distribution, subject to the statutory minimum. This is an exception, not a routine way to disregard creditors.

Failure to perform

A missed schedule does not discharge the debt. On statutory grounds the plan may be cancelled, the individual declared bankrupt and asset realization opened. Income should therefore be projected conservatively and material changes disclosed promptly.

FAQ

Must every claim be paid in full?

The plan generally provides proportional payment. A creditor may consent to less, while court approval remains subject to statutory conditions.

Can the debtor request immediate asset realization?

The debtor may explain why no feasible plan exists, but the court decides the procedural route from the evidence.

Who writes the plan?

The debtor, an insolvency creditor or the authorized public body may propose it. The manager organizes review but does not automatically become its author.

Is this a settlement agreement?

No. A plan is a restructuring-procedure instrument. A settlement agreement ends the bankruptcy proceedings on court-approved terms.

What changed on 3 April 2026

Protected receipts are an exception to the account restriction. During restructuring, a debtor generally needs the financial manager's written consent for transactions on bank accounts and deposits. Federal Law No. 62-FZ clarified that this restriction does not apply to funds that cannot be seized under Russian enforcement legislation.

1. Identify the type of receipt

The legal nature of the funds matters, not merely the payment label shown by the bank. Keep evidence of the payment's purpose.

2. Do not treat the account as unrestricted

The amendment concerns protected funds only. The general written-consent rule continues to apply to other transactions.

3. Preserve supporting records

A benefit certificate, account statement and documents separating the protected receipt from other funds may be important.

Does every social payment fall outside the consent rule?

No conclusion should be based on an everyday payment label alone. The particular receipt must fall within the funds protected from enforcement under the applicable legislation.

Primary source: Federal Law No. 62-FZ of 23 March 2026 (Russian official text).

Official sources

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