ArmInfo. Armenia has decided to tackle the problem of fictitious debt write-offs. The National Assembly of the Republic of Armenia is discussing the draft of the new Bankruptcy Code in its second reading at its regular session on June 17.
According to Tigran Dadunts, Deputy Minister of Justice of the Republic of Armenia, the country has seen a sharp increase in bankruptcy filings over the past five years, including from individuals. While less than 1,000 applications were filed annually in 2019-2020, the number will rise to 5,000 in 2024-2025, of which approximately 4,000 are from individuals. Dadunts noted that this trend indicates an abuse of the procedure: some applicants, while remaining solvent, are using bankruptcy to evade debt obligations.
To curb such practices, the government proposes raising the minimum threshold for bankruptcy recognition from 2 million to 5 million drams, as well as expanding the courts' powers to verify the financial activity of applicants. Specifically, if suspicious transactions are detected, the court will be empowered to reject a bankruptcy petition and even overturn a previous decision to discharge debtors. The process is being reoriented toward restoring the debtor's solvency rather than focusing solely on the immediate liquidation of assets and closure of businesses.
