Abstract:

The aim of the research is to develop a rationale for the need to preserve (to exclude) the possibility of a citizen's non-exemption from debts based on the results of the bankruptcy procedure in the presence of abuses in the economic behavior of such a debtor. To achieve the research goal, the author applied the methods of observation, generalization, deduction, as well as comparative and system analysis. In addition, he used the methodology of Douglass North's institutional analysis, Tolcott Parsons' AGIL model, the methodology of Robert Merton's explicit and latent functions and dysfunctions, as well as the concept of institutional traps by Victor Polterovhich. The author of the research analyzes the current state of the bankruptcy institute of a debtor citizen; discusses the dynamics of application and the key improvements of a debtor citizen's bankruptcy institute throughout its functioning, and studies materials of case laws of citizens' bankruptcy regarding the issues of the application (non-application) of the rule on the exemption from debt payments following the results of a bankruptcy procedure. The author of the research found that since October 1, 2015, the institute of a debtor citizen's bankruptcy has affected tens of thousands of individuals. However, there exist a number of institutional barriers that prevent the most effective application of bankruptcy procedures against citizens. These barriers include attempts of unscrupulous debtors to use bankruptcy procedures to evade fulfillment of their obligations. The final conclusion of the research is formulated as follows: based on the results of the bankruptcy procedure, a citizen should not be exempted from debts in the event that obvious abuses are revealed on the part of such a debtor. Moreover, the significance lies not only in the application of the rule of non-exemption from debts based on the results of a bankruptcy procedure but also in the possibility of applying this rule in the event of abuse on the part of a debtor. This is what urges for citizens' conscientious application of the bankruptcy procedure.