Russia: Millions gain right to file for bankruptcy

Before the 2008 financial crisis, Russians were able to take out loans with minimal checks, even if they already had debts

Russians are now able to declare themselves bankrupt for the first time, under new measures brought in to manage the country's ballooning personal debt burden.

The new law, which came into effect on 1 October, applies to anyone with three months of missed payments on debts worth more than 500,000 roubles ($7,600; £5,000), the Tass news agency reports. Those with smaller debts are also eligible if they can show they're unable to pay. Until now, only companies could file for bankruptcy in Russia.

About 40 million people - half of the country's economically-active population - have at least one loan, and the number of people defaulting on their repayments has been rising as Russians continue to reel from the 2008 financial crisis. The state bailiffs agency estimates that up to 400,000 people are likely to apply for bankruptcy under the new measures.

But some legal experts have raised concerns that a flood of bankruptcy cases could prove overwhelming for the authorities, with one debt collection agency telling the Vedomosti financial daily that it expects the courts' workload to double as a result of the new law. The paper also points out that there are only 1,000 insolvency officers in the whole country, and they are already hard-pressed with winding up bankrupt firms.

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