26/01/2022
A Malaysian lawyer wants to do an individual bankruptcy search in China according to a commercial bank's requirement. However, compared to personal bankruptcy law in Malaysia, a different system for personal bankruptcy applies in China.
Until now, China still lacks a nationwide legal framework to help individuals deal with debt caused by business failure or overborrowing while also ensuring creditors are fairly compensated.
Although there is no nationwide law about personal bankruptcy in China, Shenzhen Special Economic Zone government paves the way for the national rollout of a legal system. The "Personal Bankruptcy Ordinance of Shenzhen Special Economic Zone" is effective on March1, 2021. A Chinese citizen who lived in Shenzhen and continuously pay social security for three years can apply for bankruptcy in a court of Shenzhen. We can search a person whether she/he is in bankruptcy in Shenzhen.
However, there is another definition “Dishonest Parties Subject to Enforcement” in China. In some sense, we regard a dishonest party as a person who has no capability to bear business obligations. We also can do such research for customers.
According to "Several Provisions of the Supreme People's Court on Announcement of the List of Dishonest Parties Subject to Enforcement (Revision 2017)",
Where a party subject to enforcement does not perform the obligations determined in the valid legal document, under any of the following circumstances, the People's Court shall include him/her in the list of dishonest parties subject to enforcement, and implement creditworthiness punishment pursuant to the law:
(1) he/she has the capacity to perform but refuses to perform the obligations determined in the valid legal document;
(2) he/she hinders or resists enforcement by way of forging evidence, violence or coercion, etc;
(3) he/she circumvents enforcement by way of a or more false lawsuits, false arbitration or concealment or removal of properties, etc;
(4) violation of property reporting system;
(5) violation of an order or orders to restrict consumption; or
(6) refusal to perform settlement agreement for enforcement without a valid reason.