Shenzhen to make personal bankruptcy info public first in China

Shenzhen has made it a mechanism to share and disclose personal bankruptcy information through multiple channels, a first in China, Shenzhen Special Zone Daily reported yesterday.

The disclosure will be strictly carried out in accordance with laws and regulations, or after obtaining consent from those involved.

This trial helps deepen Shenzhen’s personal bankruptcy system reform, push forward social credit system construction and accelerate the pace in building a world-class business environment.

According to an implementation plan jointly issued by the city’s market regulation administration, bankruptcy affairs administration and intermediate people’s court, the city has established a mechanism to link individual bankruptcy with social credit, with personal bankruptcy information to be published and shared on multiple platforms to strengthen credit control and supervision and reduce bankruptcy processing costs.

The plan clarifies which among multiple personal information is put into the scope of credit information and public disclosure. This includes the state of bankruptcy, credit commitments made by relevant entities participating in bankruptcy procedures in good faith, personal bankruptcy-related restrictions, penalties and dishonest behaviors.

To enhance the efficiency of personal bankruptcy processing and accurately determine a debtor’s credit status, the plan proposed to establish a multichannel collection and multiplatform-sharing mechanism to exchange personal bankruptcy and debtor credit information in order to effectively reduce bankruptcy processing costs. At the same time, a credit verification synergy system will also be set up to allow relevant authorities to access debtors’ credit information when handling personal bankruptcy cases.

Moreover, the plan took the lead in establishing a credit control system for actions breaching trust to prevent abuse of the personal bankruptcy system. The credit control system requires debtors and bankruptcy administrators to sign commitments to ensure both sides participate in the bankruptcy proceedings in good faith. The performance status will be recorded in the public credit information management system and included in the personal credit record.

China’s first personal bankruptcy rule came into effect in Shenzhen on March 1, which provides a way out for “honest and unfortunate” individuals saddled with debt they cannot pay off.