In Russia on Thursday, comes into force the law on bankruptcy of physical persons, according to which citizens who are unable to pay banks for loans, can withdraw from the debt burden by declaring bankruptcy.

According to the law, any debtor, irrespective of the amount of the debt, will have the right to apply to the court for recognition of its bankruptcy. To obtain such status, the citizen will have to prove to the court that he is insolvent to the creditor.

To file for bankruptcy, in addition to the citizens themselves, and their creditors, for example, banks or tax service. The main condition - the debt to the lender must be not less than 500 thousand rubles, and overdue more than three months.

Before you declare a person a bankrupt, he may offer to restructure the debt. Also, the debtor and creditor can enter into a settlement agreement. If the person declared bankrupt, the court shall appoint a financial Manager that gets everything right to dispose the debtor's property.

Through the proceeds from the sale of the property and the bankrupt will pay to creditors. However, he is exempt from paying various fines and penalties that have accrued to him by the creditor for the overdue debt.