(Adopted at theFourty-fourth Meeting of the Standing Committee of the Sixth Shenzhen Municipal People's Congress on August 26, 2020)
Chapter I General Provisions
Article 1 For the purpose of standardizing personal bankruptcy procedures, reasonably adjusting the rights and obligations of debtors, creditors and other interested parties, promoting the economic regeneration of creditworthy debtors, improving the socialist market economic system, these regulations are formulated according to the basic principles of laws, administrative regulations, and combined with the Shenzhen Special Economic Zone (hereinafter referred to as the Special Zone)Actually.
Article 2 When a natural person is domiciled in the Special Zone and has participated in Shenzhen social insurance for three consecutive years, losing the ability to pay off debts or whose assets are insufficient to pay off all debts due to production, operation or living consumption, the debtor may conduct bankruptcy liquidation, reorganization or reconciliation according to these regulations.
Article 3 The principles of honesty and credibility, fair protection, equity and efficiency shall be followed to clear up the creditor's rights and debts according to these regulations .
Article 4 A natural person debtor (hereinafter referred to as the debtor) shall be exempted from its unliquidated debts according to these regulations after bankruptcy liquidation, reorganization or reconciliation.
Article 5 The case of personal bankruptcy handled according to these regulations shall be under the jurisdiction of the Municipal Intermediate People’s Court, except for that being designated to be under the jurisdiction of the basic People’s Court according to law.
Article 6 The administrative functions of personal bankruptcy affairs shall be performed by the working department or organization determined by the Municipal People's Government (hereinafter referred to as the bankruptcy administration).
Article 7 A personal bankruptcy registration system shall be established to register major personal bankruptcy matters timely and accurately as well as to disclose the personal bankruptcy-related information to the public according to law.
Chapter II Application and Acceptance
Section 1 Application
Article 8 A debtor who meets the requirements of Article 2 of these regulations may file an application for bankruptcy to the People’s Court, including application for bankruptcy liquidation, reorganization, and settlement.
The debtor shall submit the following materials in case it applies to the People’s Court for bankruptcy:
(1)written bankruptcy application, reasons and explanations for bankruptcy; and
(2)income status, social insurance certificate, and tax payment records; and
(3)a list of personal property and joint property of the spouses; and
(4)a list of claims and debts; and
(5)letter of good faith commitment.
The debtor shall provide the minors who are obligated to support according to law and the adult close relatives who have lost the work capacity and have no other sources of livehood (hereinafter referred to as the dependents), shall provide essential information and other relevant materials of the dependents.
Where the debtor lawfully employs other personnel, it shall also submit relevant materials on the payment of wages and social insurance fees of its employees.
Article 9 In case a debtor is unable to pay off the due debts, the creditors who individually or collectively hold over 500,000 yuan of due creditor's rights against the debtor, may apply to the People’s Court for bankruptcy liquidation of the debtor.
In the case of applying for bankruptcy liquidation of the debtor, a creditor shall submit the following materials to the People’s Court:
(1)written bankruptcy liquidation application; and
(2)essential information materials of the respondent; and
(3)certificate of due creditor's rights; and
(4)certificate or relevant materials of claiming a debtor to fulfill its debt in written or through legal procedures; and
(5)letter of good faith commitment.
Article 10 The People’s Court shall notify the known creditors, debtors and the bankruptcy administration within five days from the date of receiving the bankruptcy application, and make the bankruptcy application public.
If the debtor has any objection to the creditor’s application, it shall submit it to the People’s Court within seven days from the date of receiving the notification from the People’s Court.
Section 2 Acceptance
Article 11 The applicant may request to withdraw the application before the People’s Court decides to accept the bankruptcy application.
If the People’s Court rules to allow the applicant to withdraw the application, the applicant shall not apply for bankruptcy of the same debtor within one year from the date of withdrawing the application without proper reasons.
Article 12 The people's courts generally examines a bankruptcy application by means of written investigations; while a hearing investigation may be conducted if the case is complicated.
In the case of conducting a hearing investigation, the People’s Court shall notify the debtor and known creditors three days in advance, and may notify other interested parties to participate when necessary.
Article 13 The People’s Court shall decide whether to accept the bankruptcy application within 30 days from the date of receipt of the bankruptcy application. If extension is needed, upon approval of the president of the People’s Court, the time limit can be extended for 15 days.
Article 14 In the case of examining an application for bankruptcy, the People’s Court shall rule not to accept it in any of the following circumstances; in case the application has been accepted but the debtor has not yet been declared bankrupt, the People’s Court shall rule to withdraw the application:
the debtor does not comply with the provisions of Article 2 of these regulations, or the creditor’s application for bankruptcy liquidation of the debtor does not comply with the provisions of Paragraph 1 of Article 9 of these regulations; or
(2)the applicant applies for bankruptcy for improper purposes such as transferring property, maliciously evading debts, or damaging the reputation of others; or(3)the applicant has made false statements, provided false evidence and other acts that hinder the bankruptcy proceedings; or
(4)the debtor has been exempted from its unliquidated debts according to these regulations for less than eight years.
If the applicant is dissatisfied with the ruling, it may appeal to the People’s Court at the next higher level within ten days from the date of service of the ruling.
If the applicant causes losses to others due to the circumstance in the second and third items of the first paragraph of this article, it shall be liable for compensation.
Article 15 If a debtor files an application for bankruptcy and the People’s Court decides to accept it, the ruling shall be delivered to the debtor within five days from the date of acceptance.
If a creditor applies for bankruptcy liquidation of a debtor, and the People’s Court decides to accept it, the ruling shall be delivered to both the creditor and the debtor within five days from the date of acceptance. The debtor shall submit the relevant materials prescribed in Article 8 of these regulations to the People’s Court within 15 days from the date of service of the ruling.
Article 16 Within fifteen days from the date on which the People’s Court publishes an application for bankruptcy, the creditors may individually or jointly recommend the bankruptcy trustee (hereinafter referred to as the trustee) candidates to the People’s Court.
Article 17 If the People’s Court approves the trustee candidates recommended by the creditor, it shall make a decision to designate the trustee at the same time as the decision to accept the bankruptcy application. The cost of the trustee’s performance of his duties shall be prepaid by his recommender.
Where multiple creditors recommend different trustees, the People’s Court may designate one or more trustees from among them.
Article 18 If the creditor does not recommend the trustee candidate or the People’s Court considers that the candidate recommended by the creditor is inappropriate to serve as the trustee, the People’s Court shall notify the bankruptcy administration to propose the trustee candidate within five days when ruling to accept the bankruptcy application; the People’s Court shall make a decision to designate the trustee within five days after the bankruptcy administration proposes the candidate.
Article 19 When the People’s Court decides to accept an application for bankruptcy, it shall simultaneously make a decision to restrict the debtor’s behavior according to Article 23 of these regulations, deliver the ruling to the debtor, and notify the bankruptcy administration.
Article 20 The People’s Court shall publish an acceptance announcement within 20 days from the date of ruling to accept the bankruptcy application. The announcement shall specify the following particulars:
(1)the name of the applicant or respondent; and
(2)the time that the People’s Court rules to accept the bankruptcy application and applicable procedures decided by the court; and
(3)the decision to restrict the debtor's behavior; and
(4)time limit, method and precautions for the declaration of creditor's rights; and
(5)the name or appellation and address of the trustee; and
(6)the way for a person who has debts to the debtor or holds the debtor’s property to pay off the debt or deliver the property to the trustee; and
(7)the time, place and mode for convening the first creditors’ meeting; and
(8)other items that the People’s Court deems necessary to be specified.
Section 3 Effect of Bankruptcy Acceptance
Article 21 From the date when the People’s Court accepts the bankruptcy application to the date rules to exempt the debtor’s unliquidated debts according to these regulations, the debtor shall undertake the following obligations:
(1)to submit or supplement relevant materials according to the requirements of the People’s Court, the bankruptcy administration, and the trustee, and cooperate with the investigation; and
(2)to attend the creditors' meeting and answer the creditors’ inquiries; and
(3)promptly report to the bankruptcy administration and trustee in case the debtor changes its name, contact information, address and other personal information changes or needs to leave the place of residence; and
(4)do not leave the country without the consent of the People’s Court; and
(5)to register or declare major personal bankruptcy matters with the People’s Court and the bankruptcy administration on time, including bankruptcy applications, property and debt profile, reorganization plans or settlement agreements, income and consumption during bankruptcy, etc.; and
(6)to declare its bankruptcy status to the lender or credit grantor in case the debtor is borrowing more than 1,000 yuan or applying for an equal credit line; and
(7)to cooperate with the People’s Court, the bankruptcy administration and the trustee to carry out other work related to bankruptcy proceedings.
Article 22 The debtor’s spouse, children, close relatives living together, property managers, and other interested parties shall cooperate with the People’s Court, the bankruptcy administration and the trustee’s investigations, and assist the trustee in the property checking, take over and distribution.
Article 23 From the date when the People’s Court makes the decision to restrict the debtor's behavior to the date when it decides to release the restriction, except for life and work needs and with the consent of the People’s Court, the debtor shall not engage in the following consumption behaviors:
(1)in the case of taking transportation, choose business class or first-class in a plane, soft sleeper on trains, second-class and above-class seats on ships, first-class and above-class seats on high-speed trains and other bullet trains; or
(2)consume in nightclubs, golf courses guesthouses and hotels above three-star, etc.; or
(3)purchase real estate and motor vehicles; or
(4)newly build, expand or renovate houses; or
(5)children attend a high fee private school; or
(6)lease high grade office buildings, hotels, apartments and other places for business use; or
(7)pay high premiums to purchase insurance and financial products; or
(8)other consumer behaviors not necessary for life or work.
Article 24 The debtor shall not pay off the debts to specific creditors after the People’s Court has ruled to accept its application for bankruptcy. However, exceptions are made for that benefits the debtor’s property or is necessary for the debtor’s normal life and work.
Article 25 After the People’s Court has ruled to accept a bankruptcy application, the person who has debts to the debtor or holds the debtor’s property shall pay off the debt or deliver the property to the trustee.
If a person who has debts to the debtor or holds the debtor’s property deliberately violates the provisions of the preceding paragraph by paying off the debts or delivering the property to the debtor and therefore causes losses to the creditor, it shall not be exempted from the obligation to pay off the debt or deliver the property to the trustee.
Article 26 After the People’s Court has ruled to accept the bankruptcy application, the trustee shall have the right to decide to rescind or continue to perform the contract that was established before the bankruptcy application was accepted but both the debtor and the other party to the contract have not completed the performance of the contract, and notify the other party to the contract of its decision.
If the trustee fails to notify the other party to the contract within two months from the date of acceptance of the bankruptcy application, or fails to respond within 30 days from the date of receipt of the exigent notice from the other party to the contract, the contract shall be deemed rescinded.
If the trustee decides to continue to perform the contract, the other party to the contract shall perform it; however, the other party to the contract has the right to request corresponding guarantees. If the trustee fails to provide a guarantee, the contract shall be deemed rescinded.
Article 27 After the People’s Court has ruled to accept to accept an application for bankruptcy, the measures taken to preserve the debtor’s property shall be lifted, and the execution procedure shall be suspended. Except for the circumstances stipulated in Article 110 of these regulations, the execution of a specific property may not be suspended for the purpose of realizing a secured claim or other legal priority.
Article 28 The obligee who has a security right in the debtor’s specific property may at any time claim to the trustee to dispose of the specific property and exercise the priority right of payment.
When disposing of a specific property with a security right, the trustee and the secured creditor shall not harm the interests of other creditors. If other creditors suffer losses due to improper disposal, they shall be liable for compensation.
If the secured creditor fails to be fully paid after exercising the priority right of payment, its unpaid claims shall be regarded as common claims; if the secured creditor waives the priority right of payment, its claims shall be regarded as common claims.
Article 29 Once the People’s Court rules to accept the bankruptcy application and makes a decision to designate the trustee, the trustee shall participate in the civil litigation or arbitration involving the debtor’s property rights that has begun but has not yet been terminated on behalf of the debtor, unless otherwise provided by law.
Article 30 From the time of accepting the bankruptcy application until the time of terminating the bankruptcy proceeding by a People’s Court, any civil lawsuits involving the property rights of the debtor shall be under the jurisdiction of the aforesaid People’s Court, unless otherwise provided by law.
Article 31 If the debtor dies and its inheritors unanimously agree to continue the bankruptcy proceedings or there is no inheritor after the People’s Court has ruled to accept the bankruptcy application, the trustee shall take over, appraise and distribute its estate according to the relevant provisions of these regulations. The People’s Court shall rule to terminate the bankruptcy proceedings afterward.
If the inheritor of the debtor fails to reach an agreement within 30 days from the date of death of the debtor, the People’s Court shall rule to terminate the bankruptcy proceedings. The trustee shall use the debtor's property or estate to pay off the bankruptcy expenses and common benefits debt incurred, the residual properties shall be handled according to the provisions of the Civil Code of the People’s Republic of China on inheritance.
Chapter III Debtor's Property
Section 1 Property Declaration
Article 32 The property belonging to the debtor when the People’s Court rules to accept the bankruptcy application and the property acquired by the debtor prior to the exemption of unliquidated debts according to these regulations, shall be the debtor's property.
Article 33 The debtor shall truthfully declare to the People’s Court and the trustee the property and property rights under the name of the debtor, its spouse, minor children and other close relatives living together within 15 days from the date of service of the People’s Court’s ruling on the bankruptcy application:
(1)cash assets such as salary income, labor income, bank deposits, cash, third-party payment platform account funds, and housing provident fund account funds; and
(2)property rights and interests enjoyed by investing in or holding stocks, funds, investment insurance and other financial products and wealth management products in other ways; and
(3)property rights and interests enjoyed by investing in domestic and overseas non-listed joint stock limited companies, limited liability companies, registered individual industrial and commercial households, sole proprietorship enterprises, partnership enterprises, etc; and
(4)property rights and interests such as intellectual property rights, beneficiary rights of trusts, and dividends of collective economic organizations; and
(5)owned or shared land use rights, houses and other properties; and
(6)property such as transportation tools, machinery and equipment, products, raw materials, etc.; and
(7)personal collection of valuables such as Wenwan, calligraphy and painting; and
(8)the debtor's legally enjoyed property rights and interests based on inheritance, donation, and holding on behalf of others; and
(9)the property and property rights that the debtor can expect before accepting the bankruptcy application; and
(10)other property and property rights with disposal value.
The debtor’s property and property rights in the preceding paragraph shall also be truthfully declared overseas.
Article 34 Where the debtor declares property and property rights according to Article 33 of these regulations in any of the following circumstances, it shall make an explanation at the time of declaration:
(1)the property or property rights are owned by the adult child of the debtor, but the child is not yet an adult at the time of acquisition; or
(2)the debtor’s property has been leased out, the real right of security has been established and other rights burdens, or there are situations such as co-ownership or ownership disputes; or
(3)the debtor’s movable property is possessed by a third party; or
(4)the debtor's real property, specific movable property, or other property rights are registered in the name of a third person.
Article 35 If the debtor’s property has undergone the following changes in the following two years since the People’s Court ruled that it accepts the bankruptcy application, the debtor shall make a declaration together:
(1)to donate, transfer or rent property; and
(2)to establish security real rights and other rights burdens on the property; and
(3)to give up creditor's rights or extend the time limit for repayment of creditors' rights; and
(4)to pay one-off large sum of funds of more than 50,000 yuan; and
(5)to divide joint property due to divorce; and
(6)to pay off outstanding debts in advance; and
(7)other major property transfers.
Section 2 Exempted Property
Article 36 In order to protect the basic life and rights of the debtor and its dependents, the property reserved for him according to these regulations shall be exempt property. The scope of exempt property is as follows:
(1)necessities and reasonable expenses for the life, study and medical treatment of the debtor and its dependents; and
(2)items and reasonable expenses that must be kept due to the debtor's professional development needs; and
(3)items with special commemorative significance to the debtor; and
(4)personal insurance with no cash value; and
(5)medals or other articles for honors; and
(6)personal injury compensation, social insurance and minimum living allowances exclusively reserved for the debtor; and
(7)other property that should not be used to pay off debts according to legal provisions or based on public order and good customs.
If the property specified in the preceding paragraph is of relatively high value and is not used to pay off debts, which obviously violates the principle of fairness, it shall not be deemed as exempt property.
Except for the properties specified in the fifth and sixth items of the first paragraph of this article, the total cumulative value of the exempt property shall not exceed 200,000 yuan. The specific sub-items of the first and second items of the first paragraph of this article and the specific value upper limit standards of each sub-item shall be separately formulated by the Municipal Intermediate People’s Court.
Article 37 The debtor shall, within 15 days from the date of service of the People’s Court’s ruling of acceptance, submit a exempted property list to the trustee, and specify the value or amount of the property.
Article 38 The trustee shall, within 30 days from the date when the debtor submits the property declaration and exempted property list, review and prepare the debtor's property report, put forward opinions on the exempted property list, and submit it to the creditors’ meeting for voting.
If the debtor’s exempted property list fails to be adopted by the creditors’ meeting, the People’s Court shall make a ruling.
Article 39 Except for the circumstances specified in Article 109 of these regulations, the trustee shall take over all the debtor’s property except for the ship’s exempt property.
Section 3 Property Transaction Act
Article 40 In the two years before the bankruptcy application is filed, the trustee has the right to request the People’s Court to revoke the following dispositions involving the debtor’s property:
(1)to dispose property or property rights without compensation; or
(2)to conduct transactions on obviously unreasonable conditions; or
(3)to establish additional property guarantees for debts without property guarantees; or
(4)to establish the right of residence for others with own real estate; or
(5)to pay off undue debts in advance; or
(6)to exempt debts or maliciously extend the time limit for the performance of due claims; or
(7)to provide guaranty for third parties other than relatives and interested parties.
Article 41 If the debtor pays off specific creditors within six months before the bankruptcy application is filed, or pays off its relatives and interested parties within two years before the bankruptcy application is filed, the trustee may request the People’s Court to revoke it, unless the specific liquidation benefits the debtor’s property or is necessary for the debtor’s normal life.
Article 42 The following acts involving the debtor’s property are invalid:
(1)to conceal, transfer, or improperly dispose property and property rights in order to evade repayment of debts; or
(2)to fabricate a debt or admit an unreal debt.
Article 43 Where the debtor’s property is obtained as a result of the acts specified in Article 40, Article 41, and Article 42 of these regulations, the trustee shall have the right to recover it. Knowing or ought to know that the debtor is in a state of bankruptcy or is about to go bankrupt, and still conducts with the debtor the acts specified in Article 40, Article 41, and Article 42 of these regulations, causing economic losses to the dumper, it shall be liable for compensation responsibility.
Article 44 After the People’s Court decides to accept an application for bankruptcy, the trustee may take back the pledged or retained property through paying off the debt or agreeing to provide a guarantee.
If the value of the pledged or retained property is lower than the amount of pledged rights, the debt repayment or substitute guarantee provided in the preceding paragraph shall be limited to the current market value of the pledged or retained property.
Article 45 Except for the circumstances stipulated in Article 111 of these regulations, after the People’s Court rules to accept a bankruptcy application, any property which belongs to another person and possessed by the debtor, the owner of the property may retrieve such property through the means of the trustee.
Article 46 If the seller has sent the subject matter of the sale to the debtor as the buyer and the debtor has not received and paid the full price when the People’s Court decides to accept an application for bankruptcy,, the seller may take back the subject matter in transit. However, the trustee may pay the full price and request the seller to deliver the subject matter.
Article 47 If a creditor owes debts to a debtor before the bankruptcy application is accepted, it may claim set-off against the trustee. However, the offset is not allowed under any of the following circumstances:
(1)the debtor’s debtor obtains the creditor’s rights of another person to the debtor after the bankruptcy application is accepted; or
(2)the creditor owes debts to the debtor though it has already known the fact that the debtor had filed a bankruptcy application, with the exception that the debts are owed by the creditor due to any reason provided for by law or any reason occurred two years before the filing of the bankruptcy application; or
(3)the debtor’s debtor obtains the creditor’s rights to the debtor though it has already known the fact that the debtor is unable to pay off the debts that are due or the fact that the debtor had filed a bankruptcy application, with the exception that the creditor’s rights are obtained by the debtor’s debtor due to any reason provided for by law or any reason occurred two year before the filing of the bankruptcy application.
Chapter IV Declaration of Creditor's Rights
Section 1 Declaration Procedure
Article 48 After the People’s Court decides to accept an application for bankruptcy, creditors who hold claims against the debtor may exercise their rights according to the procedures prescribed in these regulations, unless otherwise provided by law.
Article 49 After accepting an application for bankruptcy, the People’s Court shall determine the time limit for creditors to declare their claims. The period for declaring claims shall be not less than 30 days at least and not more than 3 months at most, calculated from the date on which the People’s Court makes a public announcement on the acceptance of the bankruptcy application.
The trustee shall notify the known creditors to declare their claims.
Article 50 The creditor shall declare its claims to the trustee within the period determined by the People’s Court. If the creditor fails to declare its claims due to reasons that are not attributable to itself, it shall declare the creditor's rights within ten days from the date when the reason is eliminated.
Article 51 When a creditor declares its creditor's rights, it shall state in writing the amount of its claim and whether or not it is secured with property, and present relevant evidence. A creditor shall make notes if the declared claim is a joint and several one.
Article 52 One of the creditors with joint and several claim may declare their claims on behalf of all them, or they may jointly declare their claims.
Article 53 Where the debtor’s guarantor or other debtor subjected to joint and several liabilities has paid off the debt on behalf of the debtor, it shall declare the creditor’s rights with its claim against the debtor.
If the debtor’s guarantor or other debtor subjected to joint and several liabilities has not paid off the debts on behalf of the debtor, they shall declare the creditor’s rights with their future claims against the debtor, unless the creditor has declared all the creditor's rights to the trustee.
Article 54 Where several of the debtors subjected to joint and several liabilities have been ruled to apply the procedures prescribed in these regulations, their creditors may declare their claims in each bankruptcy proceeding with respect to all their claims, and truthfully explain the status of the declarations, the information of the relevant bankruptcy cases, and the amount that has been paid off.
Article 55 Within the time limit for declaration of creditor’s rights determined by the People’s Court, if the creditor fails to declare the claims due to reasons that are not attributable to itself, it shall not exercise its rights according to the procedures prescribed in these regulations.
If the creditor mentioned in the preceding paragraph fails to declare the creditor's rights within the creditor's right declaration period, it may make a supplementary declaration at the time of the final distribution of the bankruptcy property or before the completion of the reorganization plan; however, the part that has been distributed or executed before will not be supplemented for distribution.
The expenses incurred due to the review and confirmation of the supplementary declaration of claims shall be borne by the creditor of the supplementary declaration.
Article 56 If the creditor fails to declare the creditor's rights at the time of the final distribution of the bankruptcy property or before the completion of the reorganization plan, the debtor shall not be liable for repayment after the People’s Court has ruled that the debtor has been exempted from its unliquidated debts according to these regulations. However, the debts that cannot be exempted as stipulated in Article 97 of these regulations are excluded.
Section 2 Declarable Claims
Article 57 The claims declared by the creditor shall be the claims legally held by the debtor.
Article 58 Creditors may declare conditional and time-bound claims and claims pending in litigation and arbitration.
Article 59 Unexpired claims shall be deemed to be mature claims from the date when the People’s Court decides to accept the bankruptcy application; the interest-bearing claims shall cease to accrue interest from the date when the People’s Court decides to accept the bankruptcy application.
Article 60 There is no need to declare a claim for payment of support for family members bear by the debtor according to law, and the trustee shall make an announcement after investigation and verification based on the information provided by the debtor.
The debtor owes the employees’ wages, medical care, disability subsidies, and pension expenses, including the basic pension insurance, basic medical insurance and other social insurance expenses that should be paid into the employee’s personal account, as well as the compensation that should be paid to the employee according to law. The declaration shall be publicized after investigation and verification by the trustee.
If the employee of the preceding paragraph disagrees with the content of the announcement, he may request the trustee to correct it; if the trustee refuses to make the correction, the employee may file a lawsuit in the People’s Court.
Article 61 Where a trustee rescinds a contract according to Article 26 of these regulations, the other party to the contract may declare its claim as to its rights to claim damages incurred from the rescission of the contract.
Article 62 Where a debtor who is the principal of the entrustment contract, and the agent does not know that the People’s Court has ruled to accept the bankruptcy application filed by the debtor or the creditor against the debtor, and continue to handle the entrusted affairs, the agent may declare its claim as to its right of request incurred therefrom.
Article 63 Where the debtor, as the issuer of a bill, has been ruled to accept an application for bankruptcy, and the payer of the bill continues to pay or accept the bill, the payer may declare the creditor's rights with the resulting claims.
Section 3 Review of Creditor's Rights
Article 64 After receiving the materials for declaring claims, a trustee shall register these materials in a detail, review the declared claims, and compile the list of claims.
Article 65 A trustee shall submit the list of claims to the debtor and the first creditors’ meeting for verification within 15 days from the expiration of the creditor's rights declaration period.
Where the debtor and creditor have no objection to the creditor's rights recorded in the list of claims, the People’s Court shall confirm the claims by order.
Where the debtor or creditor disagrees with the claims recorded in the list of claims, it may submit a statement of objection to a trustee and explain the reasons and basis within 15 days from the date of receipt of the list of claims. After being reviewed by the trustee, if the dissident is still dissatisfied, it may bring a suit in the People’s Court that accepts the bankruptcy application within 15 days of receiving the review opinion of the trustee.
Chapter V Bankruptcy Expensesand Common Benefits Debt
Article 66 The following costs incurred after a bankruptcy application is accepted by the People’s Court shall be bankruptcy expenses:
(1)the litigation costs in bankruptcy cases;
(2)the costs incurred in the management, appraisal and distribution of the debtor’s property;
(3)the costs and remuneration for a trustee to perform its duties.
Article 67 The following debts generated after a bankruptcy application is accepted by the People’s Court shall be common benefits debt:
(1)a trustee or the debtor requests the other party to the contract to perform the debts incurred in the contract that both parties have not fulfilled; and
(2)debts arising from a negotiorum gestio of the debtor’s property; and
(3)debts incurred by the debtor due to unjust enrichment; and
(4)debts incurred from damages caused by the performance of duties by a trustee; and
(5)debts arising from any damage to another person caused by the debtor’s property; and
(6)debts arising from the provision of financing or guarantees for the debtor's reorganization; and
(7)the labor remuneration and social insurance contributions payable for continuing the business operations of the debtors and other debts generated therefrom
Article 68 Bankruptcy expenses and common benefits debt shall be paid off at any time with the debtor’s property.
Where the debtor’s property available for distribution is insufficient to pay off all bankruptcy expenses and common benefits debt same in order, the bankruptcy expenses shall be paid in priority.
Where the debtor’s available property for distribution is insufficient to pay off all costs for bankruptcy proceedings or common benefits debt in the same order, the debts shall be paid off in proportion.
Chapter VI Creditors’ Meeting
Section 1 Organizational Form
Article 69 Creditors who have declared their creditor's rights according to law and have been reviewed and compiled into the list of claims by a trustee have the right to participate in the first creditors' meeting, verify the creditor's rights and exercise the right to vote.
A creditor confirmed by a ruling of the People’s Court or confirmed by a judgment of a right confirmation litigation is a member of the creditors’ meeting and has the right to participate in the creditors’ meeting and exercise the right to vote. If only one creditor declares the creditor's rights or the creditor's rights are confirmed, it shall exercise the functions and powers of the creditors' meeting.
Article 70 Creditors whose claims have not been decided, unless being temporarily decided by the People’s Court for the purpose of voting, shall not exercise the right of voting.
Creditors may appoint an agent to attend the creditors’ meeting and exercise their voting rights. When the creditor’s agent attends the creditors’ meeting, it shall submit the creditor’s written form of authorization.
Article 71 During the bankruptcy liquidation process, creditors who have a security right in the debtor’s specific property and have not given up their priority right to repayment shall not participate in the deliberation and voting on the bankruptcy property distribution plan.
During the reorganization process, creditors whose rights and interests are not affected by the draft reorganization plan shall not participate in the deliberation and voting on the draft reorganization plan.
Article 72 The creditors’ meeting may have one chairperson, who is designated by the People’s Court from among the creditors.
The chairperson of the creditors’ meeting shall preside over the creditors’ meeting.
Article 73 The creditors’ meeting shall exercise the following functions and powers:
(1)to examine the creditor's rights; and
(2)to supervisors; and
(3)to apply to the People’s Court for replacing the trustee; and
(4)to review the fees and remuneration of the trustee; and
(5)to authorize the trustee to dispose of the debtor's property and property rights within a certain amount; and
(6)to elect and replace members of the creditors’ committee; and
(7)to review and adopt the exempted property list; and
(8)to review and adopt the reorganization plan; and
(9)to review and adopt the debtor's property management plan; and
(10)to review and adopt the bankruptcy property distribution plan; and
(11)to review and adopt the debtor's unexpected income distribution plan; and
(12)to resolute other matters stipulated in these regulations or required by the People’s Court to be considered by the creditors' meeting.
The creditors' meeting shall keep its minutes of the resolutions on the matters discussed at the meeting.
Article 74 The creditors’ meeting may decide to establish the creditors’ committee. The creditors’ committee is composed of creditor representatives selected and appointed by the creditors’ meeting. The members of the creditors’ committee shall be odd and shall not exceed nine persons.
The members of the creditors’ committee shall be recognized by the People’s Court with a written decision.
Article 75 The creditors’ committee shall exercise the following functions and powers:
(1)to supervise the management and disposition of the debtor’s property; and
(2)to supervise the distribution of the debtor's property available for distribution; and
(3)to propose to convene a creditors’ meeting; and
(4)other functions and powers authorized by the creditors’ meeting.
When the creditors’ committee is performing its duties, it has the right to require the trustee and debtor to explain relevant matters and provide relevant materials within the scope of the powers of the preceding paragraph.
Article 76 If the trustee or debtor refuses to accept supervision, the creditors' meeting or creditors’ committee shall have the right to apply to the People’s Court for a decision made on the matters subject to supervision. The People’s Court shall make a decision within five days.
Article 77 The trustee shall promptly report to the creditors’ committee when committing the following acts involving the debtor’s property:
(1)to transfer land, houses, intellectual property and other property or property rights; and
(2)to take out a loan; and
(3)to create a security on property; and
(4)to transfer claims or negotiable instrument; and
(5)to perform a contract that has not yet been fully performed by both the debtor and the other party to the contract; and
(6)to abandon any rights; and
(7)to take back the secured property; and
(8)other property disposal activities that have a significant impact on the interests of creditors.
If a creditors’ committee is not established, the trustee shall promptly report to the People’s Court when it implements the actions specified in the preceding paragraph.
Session 2 Convening a Meeting and Voting
Article 78 The creditors’ meeting may be convened and voted on-site, in writing or online.
Article 79 The first creditors’ meeting shall be convened by the People’s Court and held within 15 days from the expiration of the period for declaring claims.
The creditors’ meeting afterwards shall be convened when the People’s Court deems it necessary, or be convened when the trustee, the creditors’ committee, or the creditors represented by the creditor’s rights account for more than a quarter of the total creditors’ proposal.
Article 80 To convene a creditors’ meeting, the trustee shall notify the known creditors 15 days in advance.
Article 81 The resolutions of the creditors' meeting shall be adopted by a majority of creditors with right to vote present at the meeting, and the amount of their claims represented shall comprise more than half the total amount of claims, unless otherwise provided by these regulations.
Any creditor who considers that a resolution of the creditors’ meeting violates the law and encroaches upon its legal rights, it may request the People’s Court to revoke the resolution and order the creditors’ meeting to make a new resolution according to law within 15 days from the date on which the creditors’ meeting makes the resolution.
The resolutions of the creditors' meeting shall have binding force on all the creditors.
Article 82 Where the debtor’s property management plan and the bankruptcy property distribution plan fail to be adopted by the creditors’ meeting by voting, the People’s Court shall make an order therefore and notify the creditors.
Article 83 If a creditor is dissatisfied with the ruling made by the People’s Court according to Article 82 of these regulations, and the amount of the creditor's rights represented by it accounts for more than one-fourth of the total amount of the creditor's rights with voting rights on the voting matters, the creditor may collect it himself Apply for reconsideration within 15 days from the date of the ruling. The execution of the ruling shall not be suspended during the reconsideration.
Chapter VII Bankruptcy Liquidation
Section 1 Bankruptcy Declaration
Article 84 After the debtor’s property report, the exempted property list, and the creditor’s declaration of claims have been verified or adopted by the creditors’ meeting, and confirmed by the People’s Court, the debtor or trustee may apply to the People’s Court to declare the debtor bankrupt.
If the People’s Court determines that the debtor meets the conditions for declaring bankruptcy, it shall rule to declare the debtor bankrupt. The People’s Court shall deliver the ruling on the debtor and trustee within five days from the date of the ruling, and publish an announcement.
After the debtor is declared bankrupt, the debtor’s property shall be bankruptcy property.
Article 85 Before bankruptcy is declared, the People’s Court shall rule to terminate the bankruptcy proceedings in any of the following circumstances and publish an announcement:
(1)the debtor has paid off all due debts; or
(2)a third party pays off all due debts for the debtor.
If the People’s Court rules to terminate the bankruptcy proceedings according to the provisions of the preceding paragraph, it shall make a decision to release the restriction on the debtor's behavior at the same time, deliver the decision to the debtor, and notify the bankruptcy administration.
Article 86 From the date when the People’s Court declares the debtor bankrupt to the date when the debtor is ruled to exempt unliquidated debts according to these regulations, the debtor shall not serve as director, supervisor or senior manager of listed companies, unlisted public companies and financial institutions.
Article 87 The trustee shall dispose of the bankruptcy property according to the relevant regulations of the People’s Court on auctions and appraisal, and conduct online auctions and other methods on open trading platforms.
The reserve price of the property auction shall be determined with reference to the market price, or it may be determined through directional price adjustment and online inquiry. If the auction fails twice in the online auction, the trustee may dispose of it through online appraisal. However, unless the creditors' meeting has other resolutions or the laws and administrative regulations provide otherwise.
Article 88 If the bankruptcy property is not suitable for disposal and distribution due to the fact that the cost of realizing it is higher than the value of the property, the disposal and distribution may be abandoned and returned to the debtor after approved by the creditors’ meeting.
Article 89 After the bankruptcy property pays the bankruptcy expenses and common benefits debt in priority, other debts shall be paid off in the following order:
(1)payment of support for family members bear by the debtor and compensation for personal damages owed by the debtor;
(2)the salaries, expenses for medical care, disability subsidies, pensions and other expenses owed by the debtor to the employees shall be paid into the basic endowment insurance, basic medical insurance and other social insurance expenses of the employees’ personal accounts, and the compensation shall be paid to the employees according to law;
(3)the tax owed by the debtor;
(4)common bankruptcy claims, in which the debtor’s spouse, former spouse, close relatives living together, and adult children shall not be repaid as ordinary creditors before other ordinary bankruptcy creditors have been fully paid off;
(5)fines owed due to illegal or criminal acts.
If the bankruptcy property is insufficient to pay off the credit rights of the same order, it shall be distributed in proportion.
Article 90 A trustee shall draft a bankruptcy property distribution plan timely and submit it to the creditors’ meeting for deliberation.
The bankruptcy property distribution plan shall specify the following particulars:
(1)the title or name and domicile of the creditor who participates in the property distribution; and
(2)the amount of claims involved in the property distribution; and
(3)the amount of property available for distribution; and
(4)the sequence of distribution and the proportion and amount of property to be distributed; and
(5)the method for distributing the property; and
(6)the method for distributing the debtor's future income.
After the creditors' meeting has adopted the bankruptcy property distribution plan, the trustee shall submit the plan to the People’s Court with the request that and order be made to approve the plan.
If the People’s Court decides to approve the bankruptcy property distribution plan, it shall also decide to terminate the bankruptcy liquidation procedure and publish an announcement.
Section 2 Property Distribution
Article 91 The trustee shall be responsible for the implementation of the bankruptcy property distribution plan.
Where the trustee implements multiple distributions according to the bankruptcy property distribution plan, it shall announce the amount of property and claims for the current distribution. Where the trustee implements the final distribution, it shall have this situation stated in the announcement and specify the relevant matters concerning the withdrawal of the distribution amount.
Article 92 With regard to a claim with collateral conditions on its entry into effect or rescission, a trustee shall deposit the distribution quota therefore.
Where, on the date on which the public announcement for final distribution is made, the collateral conditions on entry into effect are not satisfied or the collateral conditions on rescission are satisfied, the distribution quota deposited by the trustee according to the preceding paragraph shall be distributed to other creditors. Where, on the date on which the public announcement for final distribution is made, the collateral conditions on entry into effect are satisfied or the collateral conditions on rescission are not satisfied, the distribution quota shall be delivered to the creditor.
Article 93 If the distribution quota of bankruptcy property fails to be received by the creditor, the trustee shall deposit it. If the creditor has not received the payment within two months from the date of the final distribution announcement, it shall be deemed to have waived the right to receive the distribution, and the trustee shall distribute the deposited distribution to other creditors.
Article 94 When distributing the bankruptcy property, the trustee shall deposit the distribution quota of the claims unsettled in a litigation or arbitration. If the bankruptcy liquidation proceedings have not been accepted for two years since the People’s Court rules to terminate the bankruptcy liquidation proceedings, the trustee shall distribute the deposit distribution quota to other creditors.
Section 3 Exemption Inspection
Article 95 Three years from the date when the People’s Court declares the debtor bankrupt, it is the period of pending investigation for exemption of the debtor's unliquidated debts (hereinafter referred to as the period of pending investigation).
Article 96 During the period of pending investigation, the debtor shall continue to perform the obligations stipulated in the People’s Court’s decision to restrict acts and perform the debts stipulated in these regulations
If the debtor violates the provisions of the preceding paragraph, the People’s Court may decide to extend the period of pending investigation, but the extension shall not exceed two years.
Article 97 The following debts may not be exempted, unless the creditor voluntarily waives it or the law provides otherwise:
(1)compensation for damage caused by intentional or gross negligence infringing on the physical rights or life rights of others; or
(2)payment based on legal status relations; or(3)the right to claim remuneration and the right to return the advance payment based on the employment relationship; or
(4)debts that the debtor knows about but fail to be recorded in the list of claims and debts, unless the creditor knows that the People’s Court has ruled to declare the debtor bankrupt; or
(5)compensation for property damage caused by malicious infringement; or
(6)taxes owed by the debtor; or
(7)fines owed due to illegal or criminal acts; or
(8)other debts that cannot be exempted by law.
If the debts specified in the preceding paragraph are not exempted due to the debtor’s loss or partial inability to work, the debtor and its dependents will have extremely difficult lives for a long time, the debtor or trustee may apply to the People’s Court for partial or complete exemption.
Article 98 The debtor shall not be exempted from the unliquidated debts under any of the following circumstances:
(1)deliberately violate the provisions of Article 23 and Article 86 of the regulations on restrictions on debtors' behavior; or
(2)deliberately violate the obligations of the debtor in Article 21 of these regulations, and the obligations of the debtor's property declaration in Articles 33 to 35; or
(3)debts or significant decrease in property caused by extravagant consumption, gambling, etc.; or
(4)concealing, destroying, abandoning, forging or altering financial vouchers, seals, correspondence documents, electronic documents and other materials; or
(5)concealing, transferring, or destroying property, improperly disposing of property rights and interests, or improperly reducing the value of property; or
(6)other circumstances that cannot be exempted according to law.
Article 99 During the period of pending investigation, the debtor shall register and declare information on personal income, expenditure, and property status in the bankruptcy information system of the bankruptcy administration every month.
The trustee is responsible for supervising the debtor’s relevant behaviors during the period of pending investigation, reviewing the annual personal income, expenditure and property reports submitted by the debtor, and taking over and distributing the debtor’s annual new or newly discovered bankruptcy properties according to the bankruptcy property distribution plan.
The bankruptcy administration shall inspect and supervise the changes of the debtor’s income, expenditure, property, etc., and the performance of duties by the trustee, and shall make it public according to law.
Article 100 When the period of pending investigation expires, the debtor may apply to the People’s Court for exemption of its unliquidated debts according to the relevant provisions of these regulations. If the debtor meets one of the following circumstances, it shall be deemed that the period of pending investigation has expired:
(1)the debtor has paid off the remaining debts or the creditor has relieved the debtor from all the debts to pay off; or
(2)the debtor has paid more than two-thirds of the remaining debts, and the period of pending investigation has passed one year; or
(3)the debtor has paid off the remaining debts up to one-third The above is less than two-thirds, and the period of pending investigation has passed two years.
Article 101 When the period of pending investigation expires and the debtor applies for exemption of unliquidated debts, the trustee shall investigate whether the debtor has unforgivable debts and the circumstances under which unliquidated debts cannot be exempted, consult the creditors and the bankruptcy administration for their opinions, and issue a written report to the People’s Court.
Based on the debtor’s application and the trustee’s report, the People’s Court will decide whether to exempt the debtor’s unliquidated debts, and at the same time make a decision to lift restrictions on the debtor’s behavior.
Article 102 If the People’s Court decides to exempt the debtor’s unliquidated debts, it shall deliver the decision to the creditor and debtor and publish an announcement. In case the creditor is dissatisfied, he may apply for reconsideration within 15 days from the date of service of the ruling.
If the People’s Court rules that the debtor shall not be exempted the unliquidated debts, the debtor may apply for reconsideration within 15 days from the date of service of the ruling.
The effect of the ruling on exemption of unliquidated debts applies to all creditors that have been declared and undeclared. The debtor’s guarantor and other debtor subjected to joint and several liabilities who has not yet assumed guaranty liability or joint liability, shall bear the liability for repayment of the unpaid debts after the People’s Court ruling to exempt the unliquidated debts in the bankruptcy liquidation procedures according to these regulations.
Article 103 If a creditor or other interested party discovers that the debtor has obtained the exemption of unliquidated debts through fraudulent means, it may apply to the People’s Court to revoke the ruling of exempting unliquidated debts.
Article 104 If the People’s Court revokes the ruling of exemption of the debtor’s unliquidated debts, it shall deliver the revocation order to the debtor and creditors, and publish an announcement. If the debtor is dissatisfied with the revocation ruling, it may apply for reconsideration within 15 days from the date of service of the revocation ruling.
Article 105 If the People’s Court decides not to exempt the debtor's unliquidated debts, or revoke the ruling of exemption of the debtor's unliquidated debts, the creditor may continue to recover the debts from the debtor.
Chapter ⅧReorganization
Section 1 Reorganization Application and Period
Article 106 A debtor with predictable future income may apply to the People’s Court for reorganization according to these regulations.
Those who apply for reorganization shall submit a reorganization feasibility report or a draft reorganization plan in addition to the materials specified in Article 8 of these regulations.
In case that the creditor applies for bankruptcy liquidation of the debtor, while the debtor applies for reorganization, the People’s Court shall rule to accept the application for reorganization if it considers that the debtor’s application meets the requirements for acceptance of reorganization.
Article 107 After the People’s Court decides to accept the creditor's application for bankruptcy liquidation of the debtor and before the ruling is declared bankrupt, the debtor may apply to the People’s Court for reorganization. If the People’s Court considers that the debtor’s application meets the requirements for acceptance of reorganization, it shall rule to transfer to the reorganization procedure.
Article 108 The reorganization period, starting from the date when the People’s Court decides to accept the reorganization application to the end of the reorganization procedure, shall not exceed six months.
Article 109 During the reorganization period, the debtor may manage its property and business affairs by itself under the supervision of the trustee.
If it is necessary, upon the application of the creditor or the trustee, the People’s Court may decide that the debtor’s property and business affairs be taken over by the trustee.
Article 110 During the period of reorganization, if there is a security right in the debtor’s specific property and the property is necessary for the reorganization, the security right shall be suspended. However, where the secured property is likely to be damaged or to be devalued obviously in an extent to harm the rights of the secured creditor, the secured creditor may request the People’s Court to resume the exercise of the security right, or require the debtor to provide another form of security.
During the reorganization period, if the debtor borrows money to increase its future income, it may provide a security for the borrowing.
Article 111 If the debtor legally possesses the property of another person, and the right holder of the property requests to take it back during the reorganization period, the conditions agreed in advance shall be met.
Article 112 The trustee shall notify the creditor within five days if the debtor has one of the following circumstances during the reorganization period, the creditor or the trustee may apply to the People’s Court for a ruling to terminate the reorganization procedure and declare the debtor bankrupt:
(1)the debtor's property situation continues to deteriorate, and lack the possibility to reorganize; or
(2)the debtor practices fraud, maliciously reduces its property or commits other acts obviously unfavorable to creditor’s property rights and interests; or
(3)the trustee is unable to perform its duties due to the act of the debtor.
Section 2 Formulation and Approval of Reorganization Plan
Article 113 The debtor or the trustee shall submit a draft reorganization plan to the People’s Court and the creditors’ meeting within 30 days from the date when the People’s Court decides to accept the reorganization application.
When the period that the preceding clause has specified expires, upon the application of the debtor or the trustee and for just cause, the People’s Court may rule to extend the time limit for 30 days.
If the debtor or the trustee fails to form a draft reorganization plan and submit it for voting, the trustee shall apply to the People’s Court to terminate the reorganization procedure within five days.
Article 114 The draft reorganization plan shall include the following contents:
(1)the classification of claims; and
(2)debts that cannot be exempted according to Article 97 of these regulations; and
(3)the plan for adjustment of the claims; and
(4)the plan for debt settlement; and
(5)the distribution plan of predictable income and unexpected income; and
(6)the time limit for execution of the reorganization plan; and
(7)other measures favorable to the debtor's reorganization.
If the debtor and its dependents have an unpaid mortgage on the house where the debtor and its dependents’ live, the debtor and the mortgagee may reach a family housing mortgage loan plan on the principal, interest, repayment period and method of the mortgage loan, as the components of the draft reorganization plan are submitted together.
Article 115 The draft reorganization plan shall meet the following requirements:
(1)except for the family residential mortgage loan program, the time limit for implementation of the reorganization plan shall not exceed five years, and the interval between each debt settlement shall not exceed three months; and
(2)not prejudice to the security rights of secured creditor, and fair compensation shall be given to them for the losses caused by the delay in compensation; and
(3)the sequence of debt settlement complies with Article 89 of these regulations, and similar claims shall be settled on a pro rata basis; and
(4)the repayment ratio shall not be lower than the repayment ratio in the state of bankruptcy liquidation; and
(5)do not harm the state interests, public interests or the legal rights of others.
Creditors who voluntarily renounce their rights may not be restricted by the provisions of the preceding paragraph.
Article 116 The creditors shall discuss and vote on the draft reorganization plan at the creditors’ meeting in groups according to the classification of the following claims:
(1)the claims that have security rights to the particular property of the debtor; and
(2)payment of support for family members bear by the debtor and damages that are exclusive to personal compensation owed by the debtor; and
(3)The wages, medical care, disability subsidies, pensions and other expenses owed by the debtor to the employees shall be paid into the basic pension insurance, basic medical insurance and other social insurance expenses of the employees’ personal accounts, and the compensation shall be paid to the employees according to law; and
(4)the taxes and fines; and
(5)common claims.
When necessary, the People’s Court may decide to establish a small-amount claims group in the group of common claims.
Article 117 The People’s Court shall convene a creditors’ meeting within 15 days from the date of receipt the draft reorganization plan, so as to take a vote on the draft reorganization plan.
Article 118 If the creditor and debtor reach a written agreement on debt settlement before the People’s Court decides to accept the reorganization application, the agreement shall be incorporated in the draft reorganization plan and submitted it to the creditors’ meeting for voting.
If the draft reorganization plan does not modify the content of the agreement in the preceding paragraph, or the People’s Court has reviewed and modified it and does not materially impair the creditor’s rights and interests, it shall be deemed that the creditor has voted in favor of the content, and the amount of the creditor's rights represented by it shall be included in the amount of the creditor's rights that have been voted on.
Article 119 Where a majority of creditors in the same voting group attending the creditors’ meeting agree to the draft reorganization plan, and the amount of claims represented thereby comprises more than two-thirds of the total amount of claims of the said group’s, it shall be considered that the said group has adopted the draft reorganization plan.
If all voting groups pass the draft reorganization plan, the draft reorganization plan shall be passed. Within ten days from the date when the draft reorganization plan is passed, the debtor or trustee may apply to the People’s Court for approval.
If the People’s Court finds that it meets the requirements of these regulations after review, it shall make a ruling to approve the reorganization plan and terminate the reorganization procedures within 15 days from the date of receipt of the application, and publish an announcement.
Article 120 If the draft reorganization plan fails to be adopted by all or part of the voting groups, the debtor may negotiate with the creditors to amend the draft reorganization plan, and resubmit it to the creditors meeting for voting within 15 days. The voting group or creditors whose rights and interests are not affected shall not participate in the voting.
The resubmissions for voting specified in the preceding paragraph shall not exceed two times.
Article 121 Where some of the voting groups fail to adopt the draft reorganization plan, the debtor or trustee may apply to the People’s Court for approving the draft reorganization plan within ten days from the date of voting, provided that the draft reorganization plan complies with the provisions of Article 114 and Article 115 of these regulations.
Where the People’s Court, upon examination, finds that the draft reorganization plan meets the provisions of the preceding paragraph, it shall make a ruling to approve the reorganization plan, terminate the reorganization procedure and publish an announcement within 30 days from the date of receipt of the application.
Article 122 Where a draft reorganization plan fails to be adopted and fails to be approved within six months from the date when the People’s Court ruled to accept the reorganization application according to the provisions of these regulations, or the reorganization already adopted fails to be approved, the People’s Court shall rule to terminate the reorganization procedure.
Upon application by the debtor or creditor, if the People’s Court finds that the debtor meets the conditions for bankruptcy, it shall rule to declare the debtor bankrupt and conduct bankruptcy liquidation.
Acts related to bankruptcy liquidation that already occurred shall be effective, and the reorganization trustee continues to serve as the bankruptcy liquidation trustee .
Article 123 The reorganization plan approved by the People’s Court shall have binding force on the debtor and all creditors.
A creditor’s rights to the debtor’s guarantor and other debtor subjected to joint and several liabilities shall not be affected by the reorganization plan, unless the creditor voluntarily waives it.
Article 124 If the People’s Court rules to approve the reorganization plan, a decision shall be made to release the restriction on the debtor's behavior, the decision shall be delivered to the debtor, and the bankruptcy administration shall be notified at the same time.
Section 3 Implementation of the Reorganization Plan
Article 125 The debtor shall be responsible for the implementation of the reorganization plan.
The trustee shall assist and supervise the implementation of the reorganization plan within the time limit specified in the reorganization plan from the date when the People’s Court ruled to approve the reorganization plan.
The debtor shall report to the bankruptcy administration and the trustee on the income, expenditure and debt settlement during the execution of the reorganization plan every month. The bankruptcy administration shall register it and make it public according to law.
Article 126 Within ten days from the expiration of the implementation period of the reorganization plan, the trustee shall submit an implementation report to the People’s Court and the bankruptcy administration. The interested parties in the reorganization shall have the right to consult the report.
Article 127 If the approved reorganization plan cannot be executed on time due to reasons that are not attributable to the debtor, upon the application of the debtor, the People’s Court may approve an extension of the execution period which shall not exceed two years. The creditor shall be reasonably compensated for the losses suffered by the delayed payment.
Article 128 If the approved reorganization plan cannot be executed due to force majeure, unexpected events, etc., while the debtor has paid more than three-quarters of all kinds of debts according to the reorganization plan, the People’s Court may, upon application by the debtor, ruling to exempt unliquidated debts and terminate the implementation of the reorganization plan.
Article 129 Within fifteen days from the date when the reorganization plan is completed, the debtor may apply to the People’s Court to exempt its unliquidated debts.
Article 130 If the debtor fails to execute or cannot execute the reorganization plan, or the debtor has fraudulent behavior, the creditor may apply to the People’s Court to terminate the execution of the reorganization plan and conduct bankruptcy liquidation of the debtor. The People’s Court shall rule to terminate the execution of the reorganization plan and declare the debtor bankrupt. Acts related to bankruptcy liquidation that have occurred during the reorganization continue to be effective, and the reorganization trustee continues to serve as the bankruptcy liquidation trustee.
Article 131 If the People’s Court decides to terminate the implementation of the reorganization plan according to the provisions of Article 130 of these regulations, the creditor's commitment to adjust the creditor's rights in the reorganization plan shall become invalid. The repayment of creditors due to the implementation of the reorganization plan is still valid, and the unpaid part of the creditor's rights shall be regarded as bankruptcy creditor's rights.
The creditors specified in the preceding paragraph can continue to receive distributions only when other creditors in the same order have reached the same ratio of repayment to themselves.
Article 132 Where the People’s Court decides to terminate the execution of the reorganization plan according to the provisions of Article 130 of these regulations, the guarantee set during the reorganization period shall continue to be valid.
Chapter ⅨSettlement
Section 1 Settlement Application
Article 133 The debtor may apply to the People’s Court for settlement according to these regulations directly.
Where the debtor applies for settlement, in addition to submitting the materials specified in Article 8 of these regulations, it shall also submit a settlement feasibility report.
Article 134 After the People’s Court decides to accept an application for bankruptcy liquidation and before the debtor is declared bankrupt, the debtor or creditor may apply to the People’s Court for settlement. If the People’s Court considers that there is a possibility of reconciliation, it shall decide to transfer to the reconciliation procedure within five days from the date of receipt of the application for reconciliation.
Article 135 The People’s Court may entrust the people's mediation committee, specially invited mediators, specially invited mediation organizations, or the bankruptcy administration to organize reconciliation.
The entrusted settlement period shall not exceed two months. Within the entrusted settlement period, if the debtor and all creditors reach a settlement agreement, they may apply to the People’s Court to recognize the settlement agreement.
If the People’s Court has not designated a trustee when it decides to entrust a settlement, it may temporarily not designate a trustee.
Article 136 The debtor and all creditors may entrust organizations such as the People’s Mediation Committee, specially invited mediators, specially invited mediation organizations or the bankruptcy administration to reconcile the debt liquidation out of court. If a settlement agreement is reached, it may directly Request the People’s Court to recognize the settlement agreement.
Section 2 Recognition of Settlement Agreement
Article 137 Where the debtor applies to the People’s Court for recognition of the settlement agreement, it shall submit the following materials to the People’s Court:
(1)settlement agreement; and
(2)explanation of the settlement situation; and
(3)list of creditors; and
(4)debtor's property and debt description; and
(5)other materials deemed necessary by the People’s Court.
Article 138 The settlement agreement shall include the following contents:
(1)basic information, property and income status of the debtor; and
(2)the list of creditors and the amount of creditor's rights; and
(3)claim settlement plan; and
(4)debt relief plan; and
(5)the execution period of the settlement agreement; and
(6)other matters required by the People’s Court to be stated.
Article 139 In order to reach a settlement agreement, in addition to meeting the requirements of Article 138 of these regulations, the following conditions shall also be met:
(1)The intention to reconcile is true; and
(2)The reconciliation information is fully disclosed, the procedures are standardized and complete, the process is fair and transparent, and the voting is true and effective; and
(3)The settlement agreement does not harm the state interests, public interests, or the legal rights of others; and
(4)It does not violate the mandatory provisions of laws and administrative regulations.
Article 140 The People’s Court shall publish an announcement on the settlement agreement. The creditors or interested parties shall submit it to the People’s Court within 15 days from the date of the announcement if they have any objections to the settlement agreement.
Article 141 The People’s Court shall review the settlement agreement.
The People’s Court shall conduct aa investigation by hearing to review the settlement agreement, and notify the debtor, creditors participating in the settlement, and interested parties who raise objections to participate in it three days in advance.
Article 142 If the People’s Court finds that the settlement agreement meets the provisions of these regulations, it shall recognize the settlement agreement and terminate the settlement procedure. The aforesaid ruling shall be delivered to the debtor and creditors participating in the settlement within five days from the date of the ruling, and shall be announced by the People’s Court.
Within fifteen days after the completion of the settlement agreement, the debtor may apply to the People’s Court to exempt its unliquidated debts.
Article 143 The rights enjoyed by creditors participating in the settlement over the debtor's guarantor and other debtor subjected to joint and several liabilities shall not be affected by the settlement agreement, unless the creditors gives up voluntarily.
Article 144 If the entrusted settlement period expires and a settlement agreement cannot be reached, or the settlement agreement fails to be recognized by the People’s Court, the People’s Court shall rule to terminate the settlement procedure.
Article 145 If the entrusted settlement period is expired and the settlement agreement cannot be reached, or the settlement agreement fails to be recognized by the People’s Court, upon the debtor or creditor’s application, the People’s Court shall declare the debtor bankrupt if the debtor meets the conditions for bankruptcy. It went into bankruptcy liquidation.
Acts related to bankruptcy liquidation that have occurred before continue to be effective, and if a trustee has been designated, it shall continue to serve as the bankruptcy liquidation trustee.
Article 146 The debtor may not file another settlement application within one year from the date of the termination of the settlement procedure.
Article 147 , If the debtor and all creditors reach a settlement agreement on the handling of claims and debts by themselves in bankruptcy proceedings, it may apply to the People’s Court to terminate the bankruptcy proceedings.
Chapter X Summary Procedure
Article 148 When the People’s Court tries a personal bankruptcy case, if the relationship between the creditor's rights and debts is clear, the debtor's property status is clear, and the case is simple, the collegiate panel may apply summary procedure for trial. Where the debtor’s debt does not exceed 200,000 yuan, the trial shall be conducted by a judge alone.
Article 149 When the People’s Court decides to apply summary procedure to a case, it shall notify the creditor and debtor at the time of ruling acceptance.
For a case subject to summary procedure, the People’s Court shall conclude the trial within three months from the date of ruling to accept the bankruptcy application.
Article 150 For a case subject to summary procedure, the time limit for declaration of creditor’s rights shall be calculated from the dated of the announcement of acceptance of the bankruptcy application, and the maximum period shall not exceed 30 days.
Article 151 For a case subject to summary procedure, at the first creditors' meeting, the trustee may submit the property distribution plan and other matters to the creditors' meeting for voting in addition to checking the list of claims.
The trustee shall, without the need to vote again, carry out property distribution and additional distribution according to the plan voted and approved in the preceding paragraph.
Article 152 For a case subject to summary procedure, the trustee shall handle the relevant matters within the following deadlines:
(1)notifying known creditors to declare their claims within 15 days from the date of accepting the designation, and completing and submitting the debtor’s property status investigation report within 30 days; and
(2)informing the known creditors of the contents of the meeting and voting matters three days before the first meeting of creditors; and
(3)if the debtor has property available for distribution, it shall submit a bankruptcy property distribution report to the People’s Court within ten days after the final distribution of the bankrupt property.
Article 153 If a case that is tried by the summary procedure meets the conditions for terminating bankruptcy proceedings, the People’s Court shall make a ruling within ten days from the date of receiving the trustee’s application for terminating the bankruptcy proceedings and publish an announcement.
Article 154 For a personal bankruptcy case subject to summary procedure, the People’s Court shall rule to switch to ordinary procedures, if the court finds that summary procedure is inappropriate or the case cannot be concluded within three months, and the bankruptcy proceedings that have already been conducted shall be valid.
Chapter ⅪBankruptcy Affairs Management
Section 1 Bankruptcy Administration
Article 155 The bankruptcy administration shall perform the following duties:
(1)to determine the qualifications of trustees and establish a roster of trustees; and
(2)to propose the trustee candidates according to the provisions of Article 18 of these regulations; and
(3)to administrate and supervises the performance of duties of trustees; and
(4) to provide bankruptcy consulting and assistance services; and
(5) to assist in the investigation of bankruptcy fraud and related illegal acts; and
(6)to implement bankruptcy information registration and information disclosure systems; and
(7)to establish and improve the coordination mechanism for the handling of bankruptcy affairs by relevant government departments; and
(8)other administrative duties related to the implementation of these regulations.
Article 156 Except for that is not disclosed according to law, the bankruptcy administration shall promptly register and disclose information relevant to bankruptcy applications, behavior restriction decisions, property declarations, claims declarations, distribution plans, reorganization plans, settlement agreements, exemption inspections, etc. and provide for relevant units and individuals to inquire according to law.
Section 2 Trustee
Article 157 The trustee shall be an individual or organization that meets the requirements.
Lawyers, certified public accountants, and other individuals with professional qualifications in law, accounting, finance, or related intermediary service organizations, may serve as trustees after being approved by the bankruptcy administration.
The specific measures for the management of the designation, performance of duties and remuneration of trustees shall be formulated by the Municipal People's Government.
Article 158 An individual or institution under any of the following circumstances shall not act as a trustee:
(1)having been criminal punishment for deliberate crime; or
(2)having ever had its certificate for practicing in a related field revoked; or
(3)having interest in the case; or
(4)other circumstances under which laws and administrative regulations or the People’s Court or bankruptcy administration deem it inappropriate to serve as a trustee.
Article 159 The trustee shall perform its duties according to the provisions of these regulations and accept the supervision of the People’s Court, the bankruptcy administration, the creditors’ meeting and the creditors’ committee
The trustee shall attend the creditors' meeting as non-voting delegates, report to the creditors' meeting on the performance of its duties, and answer inquiries.
Article 160 If the creditors’ meeting considers that the trustee is unable to perform its duties fairly and according to law, or is otherwise incompetent for its duties, it may apply to the People’s Court to replace it.
Article 161 The trustee shall be diligent and responsible, and faithfully perform the following duties:
(1)to investigate and verify the basic information of the debtor, its dependents and employees; and
(2)to notify known creditors to declare their creditor's rights and review the status of their creditor's rights; and
(3)to take over the property list, vouchers, creditor's rights and debts list and other materials related to the debtor's property status; and
(4)to investigate the debtor's property status and the property changes in the first two years from the date when the People’s Court ruled that the bankruptcy application was accepted, and prepare a debtor's property report; and
(5)to put forward opinions on the debtor's exempted property list, investigate and take over the debtor's property for distribution; and
(6)to draft a distribution plan for bankruptcy assets and implement distribution; and
(7)to initiate and participate in litigation, arbitration and other activities involving the debtor’s property on behalf of the debtor; and
(8)to propose and coordinate the convening of creditors' meeting; and
(9)to manage, supervise, and assist in the implementation of the reorganization plan or the settlement agreement; and
(10)to manage and supervise the behavior of the debtor during the period of pending investigation; and
(11)other duties that the People’s Court and the bankruptcy administration require the trustee to perform according to these regulations and relevant rules.
Article 162 The trustee may, by presenting the People’s Court’s decision to designate it, inquire about the relevant information and materials of the debtor and creditor from the public security, civil affairs, social security, taxation, market supervision and other departments, as well as financial and credit reporting agencies, relevant departments and agencies shall provide assistance. When necessary, the trustee may apply to the People’s Court for issuance of an investigation order.
Article 163 The trustee is responsible for keeping the debtor’s property status report, claims declaration materials, creditors’ meeting resolutions, creditors’ committee resolutions, trustee management reports and other relevant materials for inspection by creditors and interested parties. If the trustee refuses to provide it without proper reason, the reviewer may request the People’s Court to make a decision, and the People’s Court shall make a decision within five days.
Where the materials mentioned in the preceding paragraph involve commercial secrets, the reviewer shall assume the obligation of confidentiality or sign a confidentiality agreement according to law. Those involving personal privacy or state secrets shall be handled according to relevant laws and administrative regulations.
Article 164 While performing its duties and discovering that a debtor, creditor or other relevant person is suspected of committing a crime, a trustee shall promptly report to the relevant agency.
Article 165 A trustee shall not resign from its post without justified reasons. The resignation of a trustee shall be submitted to the People’s Court for decision after being approved by the creditors meeting or the bankruptcy administration.
Article 166 The People’s Court shall determine the remuneration according to relevant rules for the trustee who performs its duties during handling of a personal bankruptcy case.
The trustee shall provide public service for bankruptcy cases where the bankruptcy property is insufficient to pay the bankruptcy expenses according to relevant rules.
ChapterⅫ Legal Liability
Article 167 Where the debtor violates the provisions of these regulations and commits one of the following acts, it shall be admonished, coercively summoned, and/or detained by the People’s Court according to law; in the case of committing a criminal offence, it shall be punished as a crime:
(1)to refuse to cooperate with the investigation, answer inquiries, or submit relevant materials; or
(2)to provide false or altered information, make false statements or misleading statements; or
(3)to intentionally conceal, transfer, destroy, improperly dispose of property or property rights, or other improperly acts reducing the value of property; or
(4)to fabricate debts or admit untrue debts; or
(5)to conceal, destroy, forge, or alter financial vouchers, seals, correspondence documents, electronic documents and other materials; or
(6)to refuse to implement the reorganization plan or settlement agreement without justifiable reasons, harming the interests of creditors; or
(7)other acts that hinder the bankruptcy proceedings.
Article 168 Where the debtor’s spouse, close relatives living together or other interested parties violate the provisions of these regulations and commit one of the following acts, it shall be admonished, coercively summoned, and/or detained by the People’s Court according to the law; in the case of committing a criminal offence, it shall be punished as a crime:
(1)to refuse to assist the People’s Court or the trustee in investigating the property and income status of the debt, provide false information or make false statements; or
(2)to help or shield the debtor to deliberately conceal, transfer, damage, improperly dispose of property or property rights and interests, or otherwise improperly reduce the value of the property; or
(3)to help or shield the debtor for fictitious debts or admit untrue debts; or
(4)to help or shield the debtor in violation of these regulations on debtors’ obligations or decisions on restricting the debtor’s behavioral; or
(5)other acts that hinder the bankruptcy proceedings.
Article 169 Where creditors or interested parties violates the provisions of these regulations by committing any of the following acts, it shall be admonished, coercively summoned, and/or detained by the People’s Court according to law; in the case of committing a criminal offence, it shall be punished as a crime:
(1)to applies for the debtor’s bankruptcy based on improper reasons; or
(2)fictitious claims, false declarations, or false claims for the right of recall or the right of set-off; or
(3)to recourse the debtor and its close relatives, or obtains the debtor's property or property rights after knowing that the People’s Court has ruled to accept the bankruptcy application; or
(4)to malicious exercise voting rights in collusion, harming the legal rights of others; or
(5)other acts that hinder the bankruptcy proceedings.
Article 170 If a trustee fails to perform its duties diligently and faithfully according to the provisions of these regulations, and causes losses to debtors, creditors or other interested parties, it shall be liable for compensation according to law.
If a trustee fails to perform or improperly performs its duties, the People’s Court shall command a correction, and may reduce its remuneration , re-designate one or take other measures according to its authority; the bankruptcy administration may suspend its qualifications or remove it from the trustee list delisting.
Where the trustee performed through malicious collusion with others to obstruct the bankruptcy proceedings, the People’s Court shall be admonished, summoned, fined, and detained according to law; in the case of committing a criminal offence, it shall be punished as a crime.
Chapter XIII Supplementary Provisions
Article 171 For debtors who meet the requirements of these regulations, their spouses may choose to apply for bankruptcy liquidation, reorganization or settlement according to these regulations at the same time.
Article 172 Where there are no provisions in these regulations, the relevant provisions of the Civil Procedure Law of the People's Republic of China, the Enterprise Bankruptcy Law of the People's Republic of China, and other laws and administrative regulations shall apply.
Article 173 These regulations shall come into force on March 1, 2021.
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