Kazakhstan to simplify extra-judicial bankruptcy procedure
Kazakhstan’s government is going to simplify the procedure of extra-judicial bankruptcy for those with unpaid debts and loans by eliminating the legal requirement for a document proving debt settlement.
MPs have approved amendments to the draft law aimed at reducing risks related to lending and protecting borrowers’ rights.
The law on bankruptcy in Kazakhstan entered into force on March 1, 2023. Since then, 9,500 Kazakhstanis have successfully gone through the procedure of extra-judicial bankruptcy, while 74,500 other bankruptcy applications have been rejected.”
«One of the key reasons for bankruptcy rejections was the absence of a document proving debtors’ attempts to settle their debts, as required by law. We have now removed this requirement as part of our efforts to eliminate excessive administrative barriers for extra-judicial bankruptcy,» the press service of the Mazhilis said in a statement.
From now on, banks and microfinance organizations are required to report whether a client’s debt has been settled directly to the credit bureau.
«Moreover, the draft law cuts the duration of the debt settlement procedure from 18 to 12 months,» the Mazhilis reported.
The context. In December 2022, Kazakhstan adopted the law on the recovery of solvency and bankruptcy for citizens of Kazakhstan.
In 2023, more than 9,000 Kazakhstanis obtained bankruptcy status, although the government received around 80,000 online applications for extra-judicial bankruptcy.
First Deputy Chair of the Agency for Regulation and Development of the Financial Market Nurlan Abdrakhmanov proposed to fine top executives of those banks that failed to reach debt settlement despite a borrower approaching them several times.
