The most common argument against China's enactment of a personal bankruptcy law is that if personal bankruptcy is allowed, there will be an incalculable and uncontrollable number of personal bankruptcy applications, the vast majority of which will go for the "dividend" of exemption from liability for residual debts in bankruptcy.
In this way, in the long run, the country's credit concept will collapse, and the phenomenon of old people will not be able to be curbed. While lending institutions and creditors suffer heavy losses, they will inevitably increase the cost of loans to hedge risks, and the losses from the increase in borrowing costs will be borne by the whole society.
The reason is not clear, let's analyze them one by one. Clause.
1. The percentage of Americans filing for personal bankruptcy is 5 per 1,000, the highest in the world. However, China's national conditions are different, and the traditional cultural concept is very strong, and it is difficult to have a so-called wave of personal bankruptcy applications. It has been more than two years since the implementation of China's first local regulation on personal bankruptcy, the Shenzhen Special Economic Zone Personal Bankruptcy Regulations, in March 2021, and the number of personal bankruptcy applications received by the Shenzhen Intermediate People's Court is only 1,635. Don't talk about bankruptcy, even if the debts are not repaid, it is very negative for the Chinese people, shame, apology, frustration, family members and so on.
Clause. Second, there is no personal bankruptcy law now, is there no old man?On the contrary, in the personal bankruptcy procedure, the declaration and review of personal property, as well as the system of bankruptcy revocation, can just discover and crack down on the old man.
Clause. 3. In the future, if there is a large number of personal bankruptcy applications, the court can grasp the criteria for filing the case and carry out appropriate control. The Shenzhen Intermediate People's Court ruled to accept 117 bankruptcy applications, and the proportion of applications and acceptance was only 7%. Moreover, in the initial stage of implementation, the court can do more personal bankruptcy reorganization and less personal bankruptcy liquidation, and wait for the society to be familiar with and understand the personal bankruptcy system such as exemption from liability for residual debts, and then vigorously promote it.
During the economic downturn, it is inevitable that debtors will not be able to pay off their due debts. Although it is inevitable that legislation will be conservative and lagging behind, we should not look ahead and stop at the economic problems and social phenomena that already exist and urgently need to be resolved. Formulate a personal bankruptcy law, and the sky will not fall. What do you think about this?Welcome to leave a message to discuss.