The author pays attention to the practical aspects of the application of Art. 42 of the Code of Ukraine on Bankruptcy Procedures (hereinafter the Code of Bankruptcy) in individual insolvency procedure. The main feature of these provisions is that the institution of individual insolvency without the status of an entrepreneur was introduced by the Code of Bankruptcy on October 21, 2019, and therefore to transactions committed by individual who do not have such status before that date, Art. 42 of the Code of Bankruptcy cannot be applied.

The purpose of the article is to reveal the specifics of invalidating transactions in the individual insolvency procedure, to identify gaps and conflicts in legal regulation, as well as to consider current judicial practice in this part.

It is argued that in the event that the debtor concludes a contract with an interested person or a gift contract before the entry into force of the Code of Bankruptcy, such transactions are not subject to the presumption of dubiousness of transactions in the bankruptcy (insolvency) procedure, since at the time of their execution, the bankruptcy legislation did not provide for appropriate grounds for their recognition invalid.

It is emphasized that the provisions of Art. 42 of the Code of Bankruptcy apply in cases of insolvency only to transactions concluded by an individual without the status of an entrepreneur after 21.10.2019.

It has been established that a transaction concluded by an individual without the status of an entrepreneur before the entry into force of the Code of Bankruptcy for the purposeof reducing the liquidation mass and evading obligations to creditors can be declared invalid only as fraudulent on general civil grounds.

A conflict was identified in the Code of Bankruptcy in terms of the fact that c. 2 p. 7 of Art. 123 actually nullifies the provisions of Art. 42, since the existence of grounds for declaring the transaction invalid will cause the closure of proceedings in the case of individual insolvency.

It is proposed to establish a ban on the discharge of debts of a debtor-individual, if the commercial court, in the insolvency proceedings, established the fact of the acquisition of the property of the debtor’s family members at the debtor’s expense and/or the registration of the debtor’s property to another family member for the purpose of evading the debtor from repayment debt to creditors.

Bibliography

Authored books

1. Poliakov B, Pravo nespromozhnosti (bankrutstva) v Ukraini: pidruchnyk dlia studеntiv vyshchyh navchnyh zakladiv (In Yure 2011) (in Ukrainian).

Journal articles

2. Butyrskyi A, ‘Klasyfikatsiia strokiv u protseduri bankrutstva’ (2021) 4 Pravo Ukrainy (in Ukrainian).

3. Hrabovan L, ‘Pravovyi status kredytoriv za Kodeksom Ukrainy z protsedur bankrutstva’ (2019) 10 Pidpryiemnytstvo, hospodarstvo i pravo (in Ukrainian).

4. Poliakov R, ‘Kharakterystyka instytutu vyznannia pravochyniv nediisnymy u protseduri bankrutstva v Ukraini’ (2022) 1 Pravo Ukrainy (in Ukrainian).

5. Poliakov R, ‘Pravovyi status borzhnyka-fizychnoi osoby u spravi pro neplatospromozhnist cherez pryzmu ukrainskoho ta nimetskoho zakonodavstva’ (2021) 11 Yurydychna Ukraina (in Ukrainian).

 Conference papers

 6. Zhukov S, ‘Problemni pytannia vyznannia nediisnymy pravochyniv borzhnyka u spravi pro bankrutstvo’ v Aktualni problemy protsedur bankrutstva v Ukraini ta mizhnarodnyi dosvid vrehuliuvannia neplatospromozhnosti: mizhnarodna naukovo-praktychna konferentsiia (2019) (in Ukrainian).

Theses

7. Kabenok Yu V, ‘Pravove rehuliuvannia arbitrazhnoho upravlinnia v protseduri bankrutstva v Ukraini’ (dys kand yuryd nauk, Instytut ekonomiko-pravovykh doslidzhen NAN Ukrainy 2018) (in Ukrainian).

Websites

8. Butyrska I, ‘Zakryttia provadzhennia u spravi pro neplatospromozhnist fizychnoi osoby: chy ye vykhid z labiryntu?’ (BORG.EXPERT, 2021) <https://borgexpert.com/ bankrutstvo/fizychni-osoby/zakryttia-provadzhennia-u-spravi-pro-neplatospromozhnistfizychnoiosoby-chy-ie-vykhid-z-labiryntu> (accessed: 21.06.2022) (in Ukrainian).