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Kazakhstan is set to forgive a significant amount of debt، with over 66،000 citizens expected to benefit from new bankruptcy procedures. This initiative aims to alleviate financial distress for a large segment of the population، with approximately 250 billion tenge in total debt being written off.

Understanding the Debt Forgiveness Initiative

Meruert Sisembaeva، head of the working department on bankruptcy at the State Revenue Committee، announced that the debt forgiveness is part of two distinct bankruptcy processes. She stated that through these procedures، 66،600 individuals have been declared bankrupt، leading to the potential cancellation of 250 billion tenge in debts.

Simplified Bankruptcy Procedures

A key component of this initiative is the introduction of simplified، out-of-court bankruptcy proceedings. This streamlined process allows individuals to apply for debt relief without the need for a lengthy court battle. The state will review the applicant's debts and assets. If the conditions are met، the debts can be forgiven outside of the judicial system. This simplified route alone is expected to clear around 132 billion tenge in debt.

Eligibility and Process for Out-of-Court Bankruptcy

Out-of-court bankruptcy is applicable for debts to banks and microfinance organizations not exceeding 1600 MCI (approximately 7 million tenge in 2026)، provided the individual has no assets and has had overdue payments for over 12 months، with attempts at settlement already made. Applications can be submitted online through the eGov.kz portal، the e-Salyq Azamat and eGov Mobile applications، or in person at a Public Service Center (PSC).

When Court Bankruptcy is Necessary

For more complex situations، where debts exceed 1600 MCI or the individual possesses assets، court bankruptcy proceedings are required. This involves submitting the relevant documentation to the court، which will then make a decision on the case. The entire bankruptcy process، whether through court or out-of-court means، is expected to take up to six months on average.

Implications and Future Credit Regulations

While bankruptcy offers debt relief، it also comes with certain restrictions for the individual. Furthermore، changes in lending regulations are set to take effect from July 1st. Banks will implement stricter assessments of borrowers' repayment capacity، introducing new indicators like the debt burden ratio and debt-to-income ratio. These measures aim to ensure more responsible lending practices by evaluating the proportion of an individual's income allocated to loan repayments and other mandatory payments.

This initiative represents a significant step towards addressing financial hardship for many citizens in Kazakhstan.

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