New regulations to prevent personal bankruptcy fraud

The Shenzhen Municipal Bureau of Justice recently released a draft of regulations on the registration and disclosure of personal bankruptcy information in Shenzhen.

The regulations, drafted by the Shenzhen Bankruptcy Affairs Administration Office, aims to enhance the transparency and credibility of the personal bankruptcy management by optimizing the bankruptcy information registration and disclosure system further.

According to the draft, the bankruptcy affairs administration office will set up a platform for the registration and disclosure of personal bankruptcy information. Courts, government departments assisting with personal bankruptcy affairs, financial institutions, credit reporting agencies, and other units will be required to provide relevant personal bankruptcy information obtained in the course of fulfilling their duties in accordance with the law. The information shared by courts will include key litigation milestones and the debtor’s asset status. By leveraging shared information, there will generally be no need to notify debtors, creditors, administrators, and other related parties to repeatedly submit the same information.

The draft clearly defines a classified management mechanism for information disclosure. Personal bankruptcy information will be disclosed through two methods: proactive disclosure and disclosure upon request. Proactive disclosure will cover the debtor’s name, partially desensitized ID number, bankruptcy asset distribution plans, reorganization plans, and key points of settlement agreements. The disclosure period varies: if the court rules to discharge the debtor from unpaid debts, the disclosure period can last up to eight years. For cases where bankruptcy petitions are dismissed, bankruptcy procedures terminated with no execution observation period for the debtor, the disclosure period will be one year. After the disclosure period expires, related information will be deleted. For institutions or individuals seeking access to information such as bankruptcy applications or asset declarations, they must specify the reason and intended use. The Bankruptcy Affairs Administration Office will respond within 10 days.

The draft also establishes strict supervision mechanisms. During the execution observation period, debtors must regularly report personal bankruptcy information. Debtors undergoing reorganization or settlement must declare their income, expenditures, and debt repayment status from the previous month each month. Liquidation debtors must report similar information monthly and provide an annual income and asset report. If debtors, creditors, administrators, or other related parties fail to report for more than three consecutive periods, submit false materials, conceal relevant facts, demonstrate signs of bankruptcy fraud, or exhibit other issues, the office will issue rectification notices and send these, along with rectification updates, to the courts.