The Supreme Court (SC) will explain in which cases the person at fault for an accident cannot be exempted from paying compensation for damage to someone else’s property within the framework of bankruptcy. A citizen, driving a newly purchased motorcycle without compulsory insurance, damaged someone else’s car, for which he was charged about 700 thousand rubles. The offender went bankrupt and, as a result of the procedure, asked to write off this debt. The court of first instance rejected his request, but the appeal and the district cassation found it possible to release the debtor from his obligations to the victim. Now the Armed Forces will sort out the situation.
The Supreme Court will consider a bankruptcy dispute arising as a result of a traffic accident. On July 22, 2023, Leonid Korolev purchased a motorcycle and, without having time to obtain a compulsory motor liability insurance policy, had an accident with it on the same day. The citizen was found guilty of the accident and was brought to administrative responsibility for violating traffic rules (traffic rules). Alexander Sorokin’s car was damaged in the incident. According to his claim, in September 2024, the Volzhsky City Court of the Volgograd Region recovered 692 thousand rubles from the culprit of the accident. compensation for damage. But the owner of the damaged car was unable to receive real compensation – in October 2024, a month after the court decision on recovery, Leonid Korolev filed for bankruptcy.
Guilt and debt
The case of a citizen’s insolvency was considered by the Arbitration Court of the Volgograd Region. In November 2024, the offender was declared bankrupt, and his only creditor was Mr. Sorokin. Upon completion of the insolvency procedure, the debtor asked to be released from his outstanding debt to Alexander Sorokin. But the court refused, considering driving a vehicle without an insurance policy a “knowingly illegal act” within the meaning of paragraph 4 of Article 213.28 of the bankruptcy law. This paragraph contains the grounds for refusing to write off debts of bankrupt citizens, including cases where “when the obligation arose or was fulfilled, the citizen acted illegally.”
However, higher authorities took the opposite position. The appeal and the district cassation indicated that a citizen is not released from debts only in cases clearly defined by law, to which this situation does not fall.
The mere fact of bringing a debtor to administrative responsibility is not a basis for refusing to write off debts.
The citizen is given ten days after purchasing the vehicle to draw up a compulsory motor liability insurance agreement, therefore, when he got behind the wheel, the bankrupt did not act illegally, it was explained in court decisions. Debts to compensate for damage to the creditor’s property are not written off only if there is intent or gross negligence in the debtor’s actions, but this form of guilt was not established by the competent authorities, the courts noted. As a result, the authorities allowed Leonid Korolev to be released from his obligations to Mr. Sorokin.
The owner of the damaged car did not agree with this and filed a complaint with the Supreme Court. Alexander Sorokin believes that the lack of an MTPL policy was gross negligence on the part of the bankrupt and deprived the creditor of the opportunity to repair the car using insurance. And the lower courts ignored the fact that the debtor did not even attempt to recover damages and likely initiated bankruptcy proceedings solely to evade the court order to collect compensation, the complaint says. Meanwhile, the resolution of the plenum of the Supreme Court No. 45 of October 13, 2015 does not allow the release from obligations of a citizen who “maliciously evaded repayment” of a debt, which refers to illegal actions. In such conditions, it is unacceptable to exempt him from payments to the victim, the creditor believes. The Supreme Court was interested in these arguments, and the case was referred to the Economic Collegium for consideration. The meeting is scheduled for June 1.
Goodness and conscience
Anton Busygin, Advisor to the Bankruptcy and Corporate Disputes Practice at BLG, notes that recently the Supreme Court has been paying more and more attention to bankruptcy cases of citizens and is increasingly pointing out the inadmissibility of exemption from fulfillment of obligations without checking and analyzing all the circumstances of the case. In general, a process of subtle reconfiguration of consumer bankruptcy can be traced, notes Oleg Permyakov, a partner at Rustam Kurmaev and Partners: “The Supreme Court is stopping the mass write-off of debts simply because the debtor wants it that way.”
Leading lawyer of AB KIAP Anna Andreeva considers the conclusion of the first instance to refuse to write off debts more correct.
Violation of traffic rules, in her opinion, is committed intentionally or due to gross negligence, which means that the claim for compensation for damage to property caused in a car accident cannot be written off. “When driving on the road, any driver has the right to expect that the damage will be compensated for by the insurance of the person who caused the harm. Using transport without compulsory motor liability insurance is prohibited, and a different approach puts all conscientious drivers in an unequal position compared to those who do not comply with the basic requirements of the law without good reason,” adds Mr. Permyakov. Mr. Busygin also considers “driving on the road without an insurance policy a deliberate violation of the law.”
However, there are other opinions. At the time of the accident, the new owner had time left (ten days) to apply for compulsory motor liability insurance, so driving on the road without insurance alone does not form a basis for refusing to write off debts, says Daniil Naymushin, managing partner of the One to One law firm. “This is a tort, liability for which is limited to compensation for damage, and not to the lifelong preservation of debt after bankruptcy,” the lawyer clarifies.
Anton Busygin believes that the Supreme Court is adjusting its practice “towards a more prudent approach to releasing debtors from obligations.”
The Economic Collegium wants to give guidelines to the courts and formulate criteria that matter, explains Forward Legal partner Oleg Sheikin. In his opinion, in the bankruptcy case of Leonid Korolev, the Supreme Court was interested not so much in the violation on the part of the bankrupt, which led to the collection of compensation, but in his actions after the debt arose. In this regard, it is necessary to find out whether the debtor in the bankruptcy procedure had the opportunity to at least partially repay the debt, whether he hid income and assets, and whether he provided all the information to the manager, notes Mr. Naimushin.
4938 bankrupt citizens
in 2025, it was refused to write off debts upon completion of the property sale procedure, according to the EFRSB.
Anna Andreeva draws attention to the fact that the procedure lasted about a year, but it is unclear whether the debtor tried to find a job and with what means he existed during this period. The lawyer clarifies that the cases of dishonest behavior of the debtor listed in the insolvency law are not exhaustive, since they show only particular examples. According to Mr. Busygin, a citizen’s quick initiation of personal bankruptcy without attempts to pay compensation can already be regarded as an abuse of right.
