A court in southern China approved the personal bankruptcy of a local couple who owed 9.28 million yuan (US$1.3 million) late last month, raising hopes of relief for financially struggling individuals as the domestic economy remains languid.
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The couple’s case is the latest instance of personal bankruptcy to be made public in Shenzhen, a major tech hub and the only city in mainland China that allows residents to discharge outstanding debts three years after a successful filing.
As of the end of August, the Shenzhen Intermediate People’s Court said it had accepted about 350 personal bankruptcy cases, covering debt restructuring, liquidation and reconciliation. The city launched its pilot programme for personal bankruptcy in March 2021.
Though decades of reform have turned China from a centrally planned system into a market economy – with a law on enterprise bankruptcy enacted in 2007 to help troubled companies recover from crippling debt – the development of a personal bankruptcy system has been comparatively slow.
A portion of personal bankruptcy applications have not been filed for review or accepted by the court, said Cao Qixuan, chief judge of the Shenzhen bankruptcy court, as quoted by the state-owned Yangcheng Evening News on Tuesday.