A Study Of The Scope Of Exempt Property In Personal Bankruptcy

Exempted property is the part of the property that is excluded from the bankruptcy estate by law in order to protect the survival and development of the debtor and the family he supports.The scope of the exempted property is in competition with the scope of the bankruptcy estate,and the expansion of the scope of the exempted property will erode the scope of the bankruptcy estate of the creditor’s repayment basis.It is difficult for creditors to get full repayment in bankruptcy proceedings.If they are deprived of part of the bankruptcy property and attributed to the debtor,it will be more difficult for creditors to protect their claims.The fairness of the exempt property rule is thus questioned.However,through the analysis of the function and value concept of exempted property rules,as long as the scope of exempted property is reasonably defined,the interests of creditors will not be infringed.A reasonable scope of exempt property is conducive to the debtor’s early economic rebirth,the creditor’s greater repayment by virtue of the debtor’s future income,and the promotion of social and economic development and reduction of social burdens.Based on the definition and analysis of the concept of exempted property and the influencing factors of exempted property,this paper mainly discusses the scope of exempted property from three aspects.The first aspect deals with the general construction of the scope of exempt property.This paper analyzes the four factors that affect the scope of exempted property,namely,the maintenance of the debtor’s survival and development level,the level of national social welfare,the level of economic development,and the debt forgiveness culture,and suggests that China should first formulate a stricter scope of exempt property.When my country specifically constructs the scope of exempted property,we should uphold two principles and construct the general scope of exempted property in the way of property types.First,the two principles refer to the principle of moderation and the principle of adaptability.According to the principle of moderation,my country determines the level of maintenance of the debtor’s survival and development based on the appropriate living standard;according to the principle of adaptability,the scope of exempted property should be able to adapt to the differences in economic development in my country’s eastern,central and western regions,as well as to meet the requirements of social development.Second,property classification refers to clarifying the three types of property that the debtor can exempt,namely,the property needed for the debtor’s survival,the property needed for the debtor’s career development,and the property exclusively for the debtor.Under each property category,the specific property content and property amount should be included.Under the category of property needed for the debtor’s survival,the debtor may exempt low-value clothing and other non-consumables,as well as food,fuel and other consumables for the debtor and his dependent relatives to survive for one month.Under the property category required for the debtor’s career development,the debtor can retain tools necessary for his career,but the value of the motor vehicle is relatively large.Unless the debtor uses the motor vehicle as a tool to engage in work and earn more than the value of the motor vehicle,it is generally not used exempt.The second aspect concerns the legislative consideration of whether future income should be classified as exempt property.In line with the creditor’s tendency implemented by my country’s regulations on the scope of strict exemption of property,our country should incorporate future income into the debtor’s property scope according to bankruptcy inflationism,and then use it as bankruptcy property for general repayment during bankruptcy liquidation.This can effectively improve the repayment rate of creditors,and also help the debtor get rid of the debt burden as soon as possible.However,in order to ensure the sustainability of the debtor’s subsequent survival and development,the law should exempt a certain share of future income for the debtor.Based on whether the debtor obtains future income through labor,future income is divided into labor income and non-labor income,and then different exemptions are made according to different types of property.The exemption ratio of labor income should be moderately relaxed,so that it can not only ensure the basic living needs of the debtor,but also ensure the subsequent development of the debtor.Non-labor income is generally included in the scope of bankruptcy property,but some properties have a role in guaranteeing the life of the debtor and the family he supports,so a moderate living standard is used as the standard to exempt part of it.The third aspect is about the regulatory measures for the debtor to improperly change the scope of exempted property.The debtor improperly changes the scope of the exempted property by exchanging the exempted property on the eve of bankruptcy,using the exempted property to pay off debts,abandoning the exempted property,and setting up a guarantee on the exempted property.The change of the scope of exempted property will affect the rights and interests of stakeholders.If the scope of exempted property is arbitrarily expanded,the scope of bankruptcy property will be reduced accordingly,affecting the interests of creditors;If the scope of exempted property is arbitrarily reduced,the rights and interests of relatives supported by the debtor will be affected.Therefore,the extent of change in the scope of exempted property needs to be limited.The reason for the change of the scope of exempted property is some acts carried out by the debtor,so a certain regulation of the behavior can effectively control the degree of the change of the scope of exempted property.First,the types and amounts of exempted property that the debtor can replace before bankruptcy should be limited.Firstly,the replaced property should be limited to what is necessary for survival and development.Secondly,items that satisfy the debtor’s spiritual value or have commemorative significance are not allowed to be replaced without justifiable reasons.Finally,the amount of replacement should be limited to prevent excessive replacement of exempt property from eroding the scope of the bankruptcy estate.Second,when the debtor gives up the exempted property and uses the exempted property to pay off the debt,it should reserve a necessary share for the survival of the relatives supported by the debtor and give them the right to express objection.Third,the effectiveness of creating a security right in exempt property.The validity of non-price guarantees set on the debtor’s survival supplies and household tools is denied,but the priority of other guarantees should not be affected.