Nearly 98,600 Kazakh citizens have officially been granted bankrupt status, with total written-off obligations reaching KZT 373 billion, according to data from the State Revenue Committee (SRC), infohub.kz reports.
A further 23,195 citizens are currently undergoing bankruptcy proceedings. Their combined debt is estimated at KZT 134.5 billion.
Kazakh legislation provides for two mechanisms for declaring a citizen bankrupt. The out-of-court procedure applies when a borrower's debt does not exceed 1,600 monthly calculation indices (MCI) and the person has no assets. The court procedure is used when debt exceeds 1,600 MCI or the citizen owns property such as a car, housing or other assets.
Bankruptcy is not simply a matter of writing off debts: each type of procedure carries its own consequences. Once declared bankrupt, a citizen faces restrictions. For five years they are barred from taking out new bank loans and microloans. They may go through bankruptcy again only after seven years. In addition, the state monitors the citizen's financial situation for three years.
Certain types of debt are not written off during bankruptcy proceedings and must still be repaid by the individual — in particular, this applies to alimony.
Thus, before filing for bankruptcy, all the pros and cons must be weighed. Each citizen decides for themselves whether to declare bankruptcy in order to resolve their financial problems at once, but then live with restrictions for years to come.
For Kazakh citizens with a stable income who are able to gradually repay their debts, an alternative is available — restoring solvency. Instead of writing off debts, a court may approve an individual debt repayment plan of up to five years. No restrictions are imposed in this case.