Going to prison for debt: how realistic is this in Russia?

The character of a person can be guessed by his attitude towards debt. Some people cannot sleep peacefully if they have not returned the hundred rubles they borrowed for travel on time. For others, multi-thousand-dollar debts do not cause any moral torment. Obviously, failure to fulfill obligations has a bad impact on both the well-being of the creditor and the state of the economy.

But how to deal with this? Alas, there are no effective mechanisms for working with debtors. Of course, they can be prohibited from traveling abroad or driving a car. Collect half of the starvation wages. What if we act radically - put him in prison? After all, there were “debt pits” in the Russian Empire.

As they say, I like this kind of feudalism. Let’s understand the legislation and find out which debts you can get imprisoned for and which ones you can’t.

Loans

Russians don’t pay their loans – that’s a fact. In 6 months In 2022, bailiffs had 12 million enforcement proceedings to collect loan debts. The total amount of “overdue payments” to be paid amounted to 2.3 trillion. rubles Are all these millions of people potential criminals?

Not really. Criminal liability in the field of loans arises for:

1. Applying for a loan to other people by deceiving them. A “hanger” (victim) is used, to which the fraudster takes a loan for a fee. Liability is provided for in Article 159 of the Criminal Code of the Russian Federation; the initiation of a case often occurs with several victims. If you try really hard and cause damage worth 12 million, you can end up in prison for a term of 3 to 10 years with a fine.
2. Providing the bank (lender) with false information in order to obtain a loan.
   Late repayment of a loan in itself will not entail liability. But if, in the absence of payments, it turns out that unreliable or false information was provided, liability is possible under Article 159.1 of the Criminal Code of the Russian Federation. If damage exceeds 6 million rubles, imprisonment for up to 10 years with a fine will apply. This is interesting! In 2022, 1,866 citizens were convicted under Article 159.1 of the Criminal Code. Of these, 28 people are in the “hardest” fourth part. But one accused under Part 4 of Article 159.1 of the Criminal Code of the Russian Federation was acquitted.
3. Taking out a loan without the intention of repaying it. The most exotic option, because it is not easy to prove intent to defraud a bank. But if the stars align, criminal liability will shine under Article 159 of the Criminal Code of the Russian Federation.

Fraud in obtaining loans: when there is a threat of criminal liability

The bank may demand criminal liability for the borrower if fraud or other illegal actions were committed when applying for loans. Here are a few reasons why a borrower may be sent to court:

• if the borrower took out a loan, but initially did not plan to repay the money;
• if forged documents or deliberately false information are submitted with the loan application, which influenced the bank’s decision;
• if the borrower has committed other illegal actions, deceived bank employees, or misled them.

For credit debts, several articles of fraud may apply at once. For example, there is a special offense for fraudulent actions with bank cards in the field of cybersecurity. Punishment for fraud occurs if the damage to the creditor is significant, but not less than 5 thousand rubles. If the damage from the borrower’s actions does not exceed 5 thousand rubles, he will be punished under the Code of Administrative Offenses of the Russian Federation.

Business debt

Legal entities and individual entrepreneurs also like to borrow funds and not pay them back. Moreover, “legal lawyers” deceive not only banks, but also each other. Especially for such situations, the legislator provided for Part 5 of Article 159 of the Criminal Code of the Russian Federation. It is possible to initiate a case if the offender deliberately fails to fulfill his or her obligation.

, which entails damage of 10 thousand rubles and more.

Important!

In 2022, 66 people were convicted under this article, and 7 of them were sentenced to imprisonment.

Example: one entrepreneur takes an advance from another to complete work (contract), and uses the money to pay off existing debt. Another option is to accept funds when it is obvious that it is impossible to fulfill the obligation (as a rule, this involves the preparation of fictitious documents). This article is rarely found in practice, the maximum penalty is 5 years in prison

.

The procedure for bringing to criminal liability for debts

Only the court can make sentences in criminal cases. Before the case is brought to court, an inquiry and/or investigation is carried out. Depending on the elements of the crime and the stage of recovery, the inquiry and investigation may be carried out by employees of the FSSP, the Ministry of Internal Affairs, and the Investigative Committee of the Russian Federation. The accused can only be an individual.

If a legal entity received a loan based on unreliable documents or information, or is in arrears on a large scale, then a criminal case may be initiated against the manager, chief accountant, or founders of the company. The legal entity itself is not held criminally liable.

Who can demand initiation of criminal proceedings

The formation of debt violates the interests of creditors under the obligation, since they cannot receive the money due. Banks, microfinance organizations, collectors of alimony or other types of debts may require the initiation of a case.

Let us note that when conducting enforcement proceedings, bailiffs are obliged to check themselves whether grounds for criminal liability for debts have arisen. If there are such grounds, the FSSP employee is obliged to initiate a case and begin an investigation, or transfer the materials to the Ministry of Internal Affairs.

Inquiry and investigation

If the debtor becomes a suspect or accused, he has the right to involve a lawyer in his defense. It is better to do this as soon as the FSSP or law enforcement agencies have opened a case. During the inquiry and investigation the following activities will be carried out:

• send requests to identify the debtor’s place of work, source of income and confirm their amount;
• will interrogate the debtor and check documents to establish the reasons for evading debt repayment;
• They will check the debtor’s property status and whether he has the ability to pay his obligations.

The amount of damage for the items listed above is quite easy to confirm. To do this, you need to check the court decision and writ of execution, materials produced by the FSSP.

What is the penalty for debts?

Real imprisonment for debt can only be obtained in exceptional cases. Usually, for such crimes, the court imposes a large fine, or sentences the debtor to arrest, probation, or various types of forced labor. However, for alimony debts you can be imprisoned for up to 1 year. Loan debt can result in a prison sentence of up to 2 years.

What are the consequences of being convicted of debt?

After the court verdict, you will have to serve the assigned sentence, i.e. pay a fine, serve imprisonment, fulfill other sanctions. Also, the obligation to pay debts will not be lifted, so creditors will be able to continue collection. Criminal liability entails a criminal record for the debtor. Consequences of a criminal record:

• problems in finding work and finding employment, since many positions and professions with a criminal record will not be hired;
• if you have a criminal record, it is almost impossible to get debts written off in bankruptcy;
• for a convicted person, each subsequent crime will be considered as a recidivism, which will significantly increase the punishment;
• the bank will immediately identify a criminal record when considering a loan application and refuse approval;
• Some countries prohibit entry for citizens with a criminal record.

These are just the main consequences that a conviction entails. It can be removed only after the expiration of a certain period, and early cancellation of a criminal record is generally used extremely rarely.

Malicious evasion of loan repayment

Article 177 of the Criminal Code of the Russian Federation is reminiscent of the practice that existed in the Russian Empire. However, the rule is applicable only to the head of the company or to a person. To initiate a case you need:

1. a judicial act on debt collection that has entered into legal force (for example, a court decision or a ruling on a court order);
2. large amount of liability (2.25 million rubles or more);
3. a real opportunity to pay off the debt, which the criminal did not take advantage of.

And also - the investigator’s desire to understand the specifics of the case.

. As a result, for the entire 2022, only 57 people were convicted under Article 177 of the Criminal Code of the Russian Federation, and 3 were acquitted. This is a fairly high percentage, much higher than the statistical average.

Duty to the common man

There is a risk of being investigated, even if a person does not take money from banks and is not engaged in entrepreneurial activities

. This scheme is as old as the world: by deceiving acquaintances and strangers, a swindler accumulates debts. The specificity of our legislation is that a law enforcement agency can intervene only if fraud is obvious.

Then the case will be opened under Article 159 of the Criminal Code of the Russian Federation, and the attacker will certainly be convicted. But this is unlikely to lead to the repayment of debts. To initiate a case, you need many victims and the obvious impossibility of fulfilling obligations. The investigation sometimes drags on for years. Fraudsters most often spend their money on entertainment that does not correspond to their income, and also on gambling.

Alimony

Alimony is a monthly amount collected from one parent in favor of the other for the maintenance of children. The problem of non-payment of these funds is so acute that since time immemorial the criminal code has included liability for debt for a child. Article 157 of the Criminal Code of the Russian Federation is popular; in 2022, 37,732 people were convicted under it, and only 4 were acquitted.

It is noteworthy that most often criminals were assigned correctional labor (in 23,745 cases). In order to be held accountable, several factors must come into play. Firstly

, evasion of payment of alimony is committed without good reason. Lack of work is not an excuse, but the presence of illness is a good reason not to transfer funds for maintenance.

Secondly

, the negligent parent must be subject to administrative penalties under Part 1 of Article 5.35.1 of the Code of Administrative Offenses of the Russian Federation. In practice, it’s like this: if you don’t pay alimony for two months, you get a protocol. If you don’t pay the same amount after the ruling, a case is initiated. Since funds for the maintenance of children must be transferred for many years, the risk of becoming a criminal is very high.

Types of liability for debts

Criminal liability for debts threatens only in exceptional cases, if the debtor deliberately and maliciously does not pay creditors and collectors. Most often you will have to answer with money:

• the principal debt on a loan, receipt or other obligations can be collected through the court;
• in addition to the principal amount of debt, penalties, penalties, and fines will almost always be collected (their amount will be determined by agreement or law);
• when the bailiffs take over the collection, they can take away the debtor’s property, seize all accounts, and write off money from them;
• Collectors may be involved in collection and will extract money through calls, personal meetings, and other methods.

Based on the results of collection, the amount of penalties may exceed the principal debt. If the sale of property begins, it may be sold below market value, which is also unlikely to please the debtor.

In addition to financial and property claims, the debtor may face more serious problems. There are several cases when he may be brought to administrative or criminal liability for debts, for illegal actions when applying for loans, during enforcement proceedings or bankruptcy. Read more about the grounds for criminal prosecution below.

Summary. Getting out of debt is difficult, but possible

Attitudes towards criminal prosecution for unfulfilled obligations vary greatly depending on the person’s situation. While debtors advocate relief from liability, creditors see justice as the only effective way to deal with the problem. The state has taken an intermediate position and uses criminal prosecution in relatively rare cases. Most often - for alimony.

In order to initiate a case, there must be malicious intent in the actions of the debtor

. This is either evasion of child support - the sacred duty of every parent. Or fraud: deception of the bank, citizens, business partners. Or failure to comply with a court decision, but only for large debts and with a real possibility of repaying them. Therefore, do not accumulate debts - it may come back to haunt you.

Can you go to jail for debt?

Yes, they can, although usually other sanctions are imposed for such crimes, from a large fine to various types of forced labor. However, the sanctions of almost all articles of the Criminal Code of the Russian Federation do provide for imprisonment. Therefore, it is better to assess the prospects of the case in advance and take the necessary measures to avoid getting a prison sentence.

For alimony

The easiest way is to “get” under criminal prosecution for alimony debts. The state understands the problems caused by malicious and prolonged evasion of child support. Therefore, the legislation is regularly tightened, and the alimony debtor faces the following sanctions:

• if you intentionally and maliciously fail to pay child support for two or more months, the debtor will be held administratively liable;
• If, during the period of the administrative penalty, there is again a delay of two months or more, Article 157 of the Criminal Code of the Russian Federation is applied;
• in case of repeated evasion of alimony payments, Part 2 of Art. 157 of the Criminal Code of the Russian Federation, where the punishment is much more severe.

The articles of the Code of Administrative Offenses of the Russian Federation and the Criminal Code of the Russian Federation do not indicate that the delay in alimony must necessarily be 2 months or more . But there is the word “ repeatedly ”. Since alimony is a periodic payment and must be paid monthly, repetition occurs when there is a delay of two or more months.

The amount of alimony debt does not matter if the period of delay is confirmed and the debtor has no valid reasons for delaying payments. Responsibility arises if alimony obligations are confirmed by a court decision or order, or a notarial agreement. If the parents verbally agreed on the procedure and terms of payments, and did not go to court or to a notary, there is no liability for late child support.

For credit debt

For debts on loans, you can also go to jail or receive another punishment. For this purpose, Article 177 of the Criminal Code of the Russian Federation is applied. But in order to be held accountable for this offense, the amount of the delay is important, i.e. the amount of damage to creditors. Criminal punishment will follow if the debt is confirmed by judicial acts and amounts to 2 million 250 thousand rubles. If the amount of debt is less, Article 177 of the Criminal Code of the Russian Federation does not apply.

To convict a debtor under this standard, it is necessary to prove malicious evasion of debt repayment. Maliciousness is confirmed if the borrower had the opportunity to pay the loans, but he deliberately and knowingly did not do so. Here are a few situations when malicious evasion of debt repayment may be detected:

• if the debtor has a permanent job and stable income, but he does not pay his loans or pay off his debts;
• if the borrower has assets that can be used to pay off creditors, but he deliberately hides the property and transfers it to other persons;
• if, after collecting the debt, the borrower received money or property by inheritance, but did not use it to pay off the obligations.

Punish according to Art. 177 of the Criminal Code of the Russian Federation, if the debt is confirmed by a court decision. If the bank did not go to court, then it is impossible to demand the initiation of a criminal case.

For traffic police fines

The Criminal Code of the Russian Federation does not have a special article for criminal liability for traffic police fines. But if the total amount of debt on fines exceeds 2 million 250 thousand rubles, then the state can apply Article 177 of the Criminal Code of the Russian Federation. Such situations are extremely rare. Therefore, non-payers of fines are usually held accountable under various articles of the Code of Administrative Offenses of the Russian Federation. For example, for failure to pay a traffic fine within 60 days, the driver may double the punishment or be sentenced to arrest or forced labor.