Now Shenzhen | July 24, 2023
A 37-YEAR-OLD Shenzhen resident surnamed Liang saddled with debts amounting to 750,000 yuan (US$104,343) has recently paid off all his debts under the court reorganization plan, becoming a financial reborn individual.
Following a failed business venture, Liang filed for personal bankruptcy in March 2021 with Shenzhen Intermediate People’s Court.
Since Liang found a job and earned 20,000 yuan a month after his business failed, the court decided to subject Liang to a restructuring process and renegotiate an installment repayment plan with his creditors, instead of resorting to immediate bankruptcy liquidation.
In July 2021, the court approved the reorganization plan, waiving interests and late fees, and ruled that Liang should repay all the principal to his creditors during a supervised three-year “probation” period.
After setting aside 7,700 yuan per month for the basic living expenses of his family of four, Liang, as an honest but unfortunate individual, used his remaining income to pay off his debt.
Within two years, Liang successfully repaid all the principal debt by April 2023, 15 months ahead of the original plan.
Shenzhen Personal Bankruptcy Administration, which carried out the execution of Liang’s case, said the conclusion of Liang’s case marked a solid step forward in the reform of the personal bankruptcy system.
Since the administration started offering counseling services for personal bankruptcy in May 2022, it has received 1,943 reservations and completed counseling for 1,801 individuals.
Shenzhen, as a capital of startups, boasted more than 4 million registered entities by the end of March. The city supports entrepreneurship and startups, and is tolerant toward law-abiding individuals facing bankruptcy.
In March 2021, China’s first personal bankruptcy rule came into effect in Shenzhen, providing a way out for “honest and unfortunate” individuals grappling with overwhelming debt.
On the same day, Shenzhen Personal Bankruptcy Administration was inaugurated to enforce the rule.
According to Xu Shengfang, deputy chief of the administration, the personal bankruptcy rule offers an opportunity for law-abiding debtors in Shenzhen to rebuild their businesses, while those seeking to exploit loopholes to evade their liabilities will face appropriate punishment.
ARTICLE FROM: Shenzhen Daily