On Exemption Rights

This paper consists of five sections. The first section deals with the concept and features of exemption rights, the relations between exemption rights and security credit, the relations between exemption rights and credit of bankrupts, and relations between the exercise of exemption rights and procedures of bankruptcy. It is held that l)the difference between security credits and exemptions rights is essential just like that between the common credits and security interest, which can not be mixed up; 2)where the bankrupt secures his own debt with his own property, the creditor is entitled to exemption right, and the claim belongs to credit of bankrupt; 3)the exercise of exemption rights is not subject but closely related to the procedure of bankruptcy. The second section deals with the basic rights of exemption rights. It is held that hypothecation, mortgage, lien and preconsideration are entitled to exemption rights but not deposit. The third section deals with the issue of the exemption rights party's application right and credit declaration. It is argued that 1 )the exemption rights party is entitled to the right to apply for bankruptcy except that it secures the debt of someone other than itself with its own property; 2)the credits entitled to exemption rights shall be declared within the expiry set by law, otherwise it shall lose the right of preconsideration; 3)regarding the position of the exemption rights' party at the creditors meeting, the bankruptcy law stipulates that it has no voting power for the meeting's decision, but on the other hand, the bankruptcy law also stipulates that the decision is binding on it. Its right and obligation is not balanced. It is a sort of damnification to the interests of the exemption rightsparty. Some revision should be made. The exemption rights part) should have voting power where it concerns its interests. The fourth section deals with the sequence of payment among different types of exemption rights. It is argued that different types of exemption rights, based on the security interest of the same quality, the earlier the registration or the effective date of contracts is, the earlier paid; regarding the exemption rights of different quality, the preconsideration shall be satisfied before other security interests, with lien satisfied before hypothecation or mortgage; where the lawfully registered hypothecation and mortgage coexist, the sequence of their establishment is the sequence of their payment; where they are established at the same time, they shall be paid in proportion to the security credits respectively; where unregistered hypothecation and mortgage coexist, the mortgagee shall be paid first. The fifth section deals with some issues of security effectiveness. 1. Regarding the security for the credits originally with no security, it is argued that 1 )the security, established at the same time the credit is established, is effective; 2) the security for the agreed debt which the concerned parties agree before the void period stipulated by law, in written contract to offer, but not offered until the void period and before the case accepted, is effective.as well; 3)the security, confirmed by the court in accordance with the executed adjudication or mediation documents, for credits originally with no security is effective. 2. Regarding the effectiveness of hypothecation of the state-assigned land, it is held that hypothecation of the slate-assigned land is ineffective unless registered and approved by the authorized government or the land administration department: as for the state-assigned land of the stated-owned enterprises covered by the national adjustment program, it shall be dealt with in accordance with the documents numbered 59, 1994 and 10, 1997. 3. Regarding the effectiveness hypothecation of the state-owned enterprises'equipment and buildings, it is argued that 1 )the hypothecation established on the state-owned enterprises' equipment (including key equipment and complete sets of equipment) is effective if registered and there is n...