ISSUES OF COMPETITION OF THE RULES OF THE CODE OF UKRAINE ON BANKRUPTCY PROCEDURES AND THE LAW OF UKRAINE “ON EXECUTIVE PROCEEDINGS” IN CASES OF INSOLVENCY OF INDIVIDUALS

The Code of Ukraine on Bankruptcy Procedures is the first insolvency law codified in domestic legislation. The legislative novelty is the so-called consumer bankruptcy provided by the Code, the restoration of solvency through the settlement of problem debts of individuals, individuals – entrepreneurs to banks, microfinance organizations, arrears of taxes, fees and other mandatory payments within the framework of litigation, and in case of impossibility – their repayment (write-off) in the procedure of debt repayment. In addition, the new Code offers special conditions for addressing the issue of “foreign currency borrowers”, which has become relevant for many Ukrainians after the financial crisis of 2008. In general, the procedure for restoring the solvency of individuals is designed to encourage responsible borrowing, start or resume business, increase economic activity and taxable income, aimed at preventing crime and unemployment. Such a procedure is beneficial not only to the debtor, but also to the state. An individual, getting rid of debts, returns to active legal work, and the state returns another economic unit to an active lifestyle, acquires another taxpayer. In addition, the procedure provides creditors of the debtor – an individual with legal grounds for instalment and (or) write-off of part of the debt, as well as improving their own financial performance. However, currently many norms of the Code and other acts of the legislation of Ukraine are inconsistent, which causes conflicts during their practical application. The article considers some aspects that arise in cases of insolvency of individuals, individuals – entrepreneurs during the competition of the Code of Ukraine on Bankruptcy Procedures and the Law of Ukraine “On Enforcement Proceedings”, which relate to: suspension of enforcement proceedings during the moratorium on satisfaction of claims creditors; removal of arrests (encumbrances) in the procedure of debt repayment; consequences of the completion of the debt repayment procedure (including the exclusion of a person from the Unified Register of Debtors), identified problematic issues and proposals for their improvement by making appropriate changes to the legislation of Ukraine.

The Economic Consequences of Bankruptcy Reform

A more generous consumer bankruptcy system provides greater insurance against financial risks but may also raise the cost of credit. We study this trade-off using the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which increased the costs of filing for bankruptcy. We identify the effects of BAPCPA on borrowing costs using variation in the effects of the reform across credit scores. We find that a one-percentage-point reduction in bankruptcy filing risk decreased credit card interest rates by 70–90 basis points. Conversely, BAPCPA reduced the insurance value of bankruptcy, with uninsured hospitalizations 70 percent less likely to obtain bankruptcy relief after the reform. (JEL D18, G15, I13, K35)

Interests Balance of Creditors and Debtors` Families in Bankruptcy Cases

The article is devoted to the legislative norms on bankruptcy of citizens, providing the possibility of exemption from the unbearable debt obligations execution. It is noted that the number of court cases in this category annually increasing. The author studied the current legal regulation and law enforcement practice of consumer bankruptcy relations, taking into account the interests of the debtor's family as a separate community, and analyzed (in the aspect of the problem of abuse of right) the courts approaches on the issues of releasing citizens from the obligations performance; the practice of challenging transactions with the common property made by the debtor and his or her spouse. There is the need to find a balance between the interests of a debtor's family in his bankruptcy case and preventing the debtor from refusing to fulfill his obligations to his creditors. The attention is drawn to the absence of clear criteria for determining the balance of competing interests with a significant number of court disputes on this issue. It was noted that a balance between the interests of creditors and a debtor's family was achieved through retaining the debtor's minimal property to ensure his livelihood. It is concluded that further study of the issue under consideration in the aspect of the implementation of the constitutional and legal principle of family, motherhood and childhood protection in bankruptcy cases.

On the Rationale for Repeated U.S. Consumer Bankruptcy Filings

A theoretical model of U.S. consumer behavior is developed which allows the consumer to file for bankruptcy protection at different points, and on multiple occasions, over her lifespan. The model allows for conspicuous consumption, hyperbolic discounting, and random budget shocks. Findings suggest that individuals who file for bankruptcy protection multiple times may be better or worse off than those who file only once. However, repeat filers present with much more skewed consumption patterns, and evidence of much higher overspending at the time of filing, than individuals who have never filed for bankruptcy or who file for the first time. Keywords: consumer bankruptcy, financial epidemiology, conspicuous consumption