Reasons for restricting the property immunity of the debtor's only residential place in the course of a citizen's bankruptcy case: directions for improving legislation

Introduction. In Russian law enforcement practice and legal doctrine, the issue of the possibility of limiting citizens' executive immunity to single housing has been the subject of active discussion over the past fifteen years. To date, the debtor's only residential premises can be sold as part of an insolvency case, however, there are no specific grounds for limiting the immunity in the legislation, and the parameters of residential premises, upon reaching which real estate can be qualified as luxury, are also not disclosed. According to the author of the study, this legislative gap needs to be filled in terms of fixing criteria for limiting the property immunity of a single dwelling in legislation.

Purpose. To characterize the approaches used in law enforcement practice to determine the grounds for limiting the property immunity of a single dwelling, to formulate proposals for improving legislation in this part.

Methods. The study of legislation, judicial practice, scientific publications, and statistical data was conducted using the formal legal method. The comparative legal method is used to compare approaches to the limitation of property immunity in domestic legislation and the law of foreign countries. The method of system and logical analysis and the method of modeling were used to analyze and formulate proposals for legislative reform.

Results. In the course of the study, it was found that the approaches used by the courts to determine the criteria for limiting the immunity of single housing do not meet the goals of the institute of insolvency and the interests of participants in the bankruptcy case. In this regard, the author suggests considering the experience of the American legislator in establishing a cost criterion for determining the signs of luxury living space. The content of this mechanism is to establish the maximum value of the debtor's residential premises, the excess of which will automatically entail the need for its implementation. The author suggests an approximate methodology for calculating such a marginal cost, based on statistical data and standards stipulated in legislation, based on the product of the average cost and the average area of a residential building.

Conclusions. Setting a ceiling on the cost of residential premises as a key criterion for limiting its property immunity can have a positive impact on the entire institution of consumer bankruptcy, namely, to promote transparency and predictability in the consideration of cases, reduce the burden on the courts, and minimize the risks of abuse by debtors.

1. Slabospiczkij A.S., Solov`eva D.A. Executive immunity in case of bankruptcy of the debtor. Bulletin of Moscow Witte University. Series 2: Legal science. 2023;3(39):31–38. (In Russ.). https://doi.org/10.21777/2587-9472-2023-3-31-38. EDN: ZBYDSY

2. Bondar' N., Klishas A., Miftahutdinov R. et al. Foreclosure on single housing: in search of a balance of interests. Zakon. 2018;(12):27–45. (In Russ.). EDN: YSFTNJ

3. Karelina S.A. Peculiarities of implementation of general legal principles in the process of citizens bankruptcy. Zakon. 2023;(6):15–24. (In Russ.). https://doi.org/10.37239/0869-4400-2023-20-6-15-24. EDN: OXXMQC

4. Gricenko E.V. The role of the Constitutional Court in ensuring the direct operation of the Constitution in Germany and Russia. Journal of Constitutional Justice. 2013;(1):14–29. (In Russ.). EDN: PTTSRV

5. Bondar N.S. Searching for equilibrium of constitutional values: once again about recovery against residential property of individual debtors. The Civilist. 2012;(4):50–57. (In Russ.). EDN: PMDYOV

6. Kantor N.E. The influence of the public element in bankruptcy cases on the development of judicial law-making. Zakon. 2023;(12):67–78. (In Russ.). https://doi.org/10.37239/0869-4400-2023-20-12-67-78. EDN: GVOOXP

7. Safonov A.V. Foreclosure of the only housing in the practice of the constitutional court of the Russian Federation. Vestnik ekonomicheskogo pravosudiya Rossijskoj Federatsii. 2021;(9):18–27. (In Russ.). https://doi.org/10.37239/2500-2643-2021-16-9-18-27. EDN: SHVJBQ

8. Miheeva L., Gal'perin M., YArkov V. et al. Executive immunity in relation to single housing: has the Constitutional Court cut the Gordian knot? Zakon. 2021;(5):18–30. (In Russ.). EDN: KOYLFY

9. Shajxeev T.I. About some issues arising during the consideration of bankruptcy cases by the courts of citizens. Arbitrazhnye spory. 2023;1(101):100–143. (In Russ.). EDN: LGJUGC

10. Agarkov M.M. The problem of abuse of law in Soviet civil law. Izvestiya AN SSSR. 1946;(6):424–436. (In Russ.)

11. Pattison N, Hynes R. Asset Exemptions and Consumer Bankruptcies: Evidence from Individual Filings. J Law Econ. 2019;63(3):557–594. https://doi.org/10.1086/708809. EDN: BXKTNO