INSOL Europe/LexisNexis coronavirus (COVID-19) Tracker of Insolvency Reforms—Shenzhen, China

INSOL Europe/LexisNexis coronavirus (COVID-19) Tracker of Insolvency Reforms—Shenzhen, China

We look at the reforms to the insolvency law in Shenzhen, China prompted by the coronavirus (COVID-19) pandemic. Written by Catherine Shen, ABLI.

Shenzhen the first to pilot Personal Bankruptcy in China

China is looking to enact the personal bankruptcy regime in Shenzhen, one of its largest cities. On 2 June 2020, the Shenzhen Municipality published the draft of China's first ever personal bankruptcy regulations for public consultation. The Personal Bankruptcy Regulations of the Shenzhen Special Economic Zone (Draft for Comments) has a total of 157 articles across 13 chapters, and public consultation ended on 18 June 2020.

No safe haven for deadbeats

To pre-empt the possibility where debtors from all over China come to Shenzhen to evade debts once the regime is in place, the regulations require debtors to have made social contribution in the municipality for three consecutive years, among other conditions, before they can avail themselves of protection. Further, the threshold for creditor-initiated personal bankruptcy filings is set at half a million RMB in debts that have fallen due (individually or collectively) to prevent abuse by creditors with smaller claims.

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About the author:

Neeta started her legal career at Allen & Overy in 2008 in the midst of the global financial crisis and the collapse of Lehmans where she gained most of her paralegal experience.

Neeta also did a short stint in litigation at the Revenue and Customs Prosecutions Office in 2006. Neeta graduated with a 2:1 honours degree from University of London, Queen Mary College and went on to obtain a distinction from the College of Law in the Legal Practice. She has been working at Lexis Nexis since April 2013.