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The law lays down the grounds for recognising the debtor bankrupt, regulates the procedure and conditions for measures to prevent insolvency and also the manner and conditions for carrying out the bankruptcy procedure.

To prevent the use of the bankruptcy procedure for the “redivision” of property, the law provides for the possibility of the debtor discharging his obligations to creditors at any stage of the procedure. The law also alters the criteria by which the debtor can be declared insolvent. Compared with the existing federal law “On Insolvency (Bankruptcy)”, the new mechanism by which the state takes part in the bankruptcy procedure and the procedure itself are improved.