Legal consequences of citizens' bankruptcy for the consumer credit system and the formation of mechanisms for the social and economic rehabilitation of the debtor

Abstract

A decade of applying Chapter X of the Federal Law on Insolvency (Bankruptcy) has produced a configuration in which the mass discharge of citizens' debts conflicts with the task of maintaining payment discipline in the consumer-credit segment. This raises the question of whether the current legal consequences of bankruptcy form a coherent system for restoring the debtor's solvency or remain a set of disconnected instruments that distribute risk between borrower and creditor in different ways. The aim of the study is to establish the functional link between the legal consequences of completing the procedure and the configuration of rehabilitation mechanisms that took shape in the legislation of 2023-2026. The formal-legal, comparative-legal and teleological methods, systemic interpretation and legal modelling were applied; the empirical basis comprised the current editions of normative acts and operational data of Fedresurs for 2021-2025. It is shown that the discharge of obligations under Article 213.28 is counterbalanced by the restrictive consequences of Article 213.30 and embedded in a wider circuit that includes judicial restructuring, a separate settlement agreement concerning mortgaged housing and a preventive self-ban on consumer credit. The expansion of the extrajudicial procedure and the rise of the simplified bankruptcy share to 10,7% by the end of 2025 indicate a shift of the institution towards its social function while creditor recovery remains extremely low. These elements form a three-circuit model – prevention, restructuring, discharge – in which the debtor's rehabilitation is achieved not by a separate procedure but by coordinating already operating legal regimes; it is precisely the mismatch of these circuits, rather than the absence of a particular mechanism, that limits the restorative effect of the institution.