No personal bankruptcy laws in China

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China modernized its bankruptcy laws for corporations back in 2007, enacting a legislative scheme similar to that of western nations, including the power to restructure insolvent corporations and avoid outright bankruptcy in certain situations.

However, the 2007 reforms did not extend to insolvent individuals, and no mechanism currently exists for individuals to free themselves from debt no matter what the circumstances. The Economist recently reported on some Chinese courts created ad hoc debt-forgiveness arrangements for individuals, in the absence of such legislation.

Individuals in China deserve the same “second chance” opportunity – when appropriate – as is available for individuals in other countries, and commentators express hope that China’s ongoing review of bankruptcy legislation will include such provisions 

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