Bankruptcy of individuals is a relatively new institution in the legal system of Kazakhstan, which entered into force on March 3, 2023. Its main purpose is to give citizens the opportunity to get rid of unbearable debts and start their financial life anew. However, the recognition of bankruptcy is not the end, but the beginning of a new stage, where it is crucial to restore solvency, credit history, and financial stability.

1. The legal basis of bankruptcy of individuals

The bankruptcy procedure of individuals is regulated by the Law of the Republic of Kazakhstan "On Restoration of Solvency and Bankruptcy of Citizens" (No. 178-VII dated 30 December 2022). The Law provides for three mechanisms of settlement of debts:

1. Out-of-court bankruptcy — when having a debt up to 1600 MCI and the absence of property and income.

2. Judicial bankruptcy — when having a debt over 1600 MCI or the presence of property.

3. Restoration of solvency — debt restructuring for up to 5 years without bankruptcy recognition.

4. Consequences of declaring bankruptcy

Advantages:

• writing-off of bad debts;

• termination of accrual of interest and penalties;

• stop pressure from creditors.

Restrictions:

• initiating a subsequent bankruptcy procedure after seven years have passed since the completion of the previous one;

• obtaining new loans is possible only with the bank’s notification about the bankruptcy after 5 years.

These measures are aimed at preventing repeated insolvency and fostering responsible financial behavior.

3. Ways to restore solvency

3.1. Creation of financial discipline

• personal budget management and cost planning;

• avoiding impulse purchases;

• creation of a reserve fund (10-20% of monthly income).

3.2. Credit repair

• use of debit cards and microloans with fast repayment;

• timely installment rates and utility bills;

• gradual formation of a positive credit reputation.

3.3.  Revenue Increase

• training and professional development;

• search for additional or remote sources of income;

• participating in government support programs — «Bastau Business», «Zhastar praktikasy», hrants from Atameken.

4. The role of the state and banks

Banks are implementing rehabilitation programs for clients after bankruptcy, which typically include measures such as limited credit limits, secured cards, and financial literacy training. The state, in turn, implements programs of social adaptation and the return of citizens to economic activity.

Bankruptcy is not a defeat, but an opportunity to start anew. The legislation of Kazakhstan provides citizens with a chance to get rid of debts and restore their financial reputation. The main thing is to use this chance wisely: develop discipline, plan expenses, and gradually regain the trust of banks. With consistent steps, financial recovery becomes achievable.

Source : https://www.gov.kz/memleket/entities/kgd-vko/press/news/details/1091629?lang=kk