In four years, Russia could see 1.8 million personal bankruptcies.

Whatever anyone says, personal bankruptcy is more of a mental, existential state for a person than an officially formalized legal status. Bankruptcy leaves an indelible mark not so much on one's credit history as on one's soul. Solomon's adage, "All things pass, and this too shall pass," doesn't apply here. And dispassionate statistics only capture the tip of this socioeconomic iceberg, failing to reflect its true scale.

First, let's look at the numbers. According to Fedresurs, last year the number of citizens declared bankrupt by the courts was 431,900, up 23.5% from 2023 (349,600). 55,600 people were able to initiate out-of-court (through the Multifunctional Center) bankruptcy proceedings, a 250% increase year-on-year. Russians who have received this status since 2015, when the bankruptcy mechanism was introduced, now owe a total of approximately 4 trillion rubles to creditors.

This year, personal bankruptcy has reached unprecedented speed. According to a major state-owned bank, six bankruptcy proceedings were initiated every minute in Russia in the first two quarters of 2025. An impressive rate of fire! Meanwhile, something far more significant remains in the background—the breeding ground for this phenomenon, also reflected in various figures. According to the Central Bank, the share of non-performing loans (more than 90 days overdue) in Russian banks has currently reached 10.5% of consumer loan portfolios. Over the past year, this figure has increased by 2.8%, from 7.7%. Or, as a survey by the National Bureau of Financial Research (NAFI) showed last year, 73% of citizens lack savings that would allow them to survive without a regular income stream (in the form of a monthly salary or interest on deposits) even for a single quarter.

In short, this puzzle is composed of a great many pieces. These include the results of a survey conducted by the International Confederation of Consumer Societies (ConfOP): 22% of respondents are unable to pay interest on loans, 18.5% spend more than half of their monthly income on payments, and 21% consider their debt burden excessive. And all of these people are, in fact, potentially bankrupt. Not in fact, but in their own perceptions, which is no less important. It's not necessary to wait until a payment is ninety days late, much less file for personal bankruptcy. If a borrower is late on a payment, the realization of their impasse may occur within a few days, or even immediately.

Bankruptcy proceedings are a necessary last resort. They resort to it when neither restructuring nor negotiations with creditors have worked. Russians owe 35 trillion rubles to banks; every economically active person in the country has a debt burden of 459,000 rubles; 50 million citizens have at least one loan. But where is the line that separates all these people from bankruptcy, not necessarily legalized? This line is intangible and treacherous, like quicksand in the desert, which awaits travelers at almost every step and is guaranteed to engulf those who have treated the elements with disdain.

It's a classic scenario: someone takes out new loans to pay off old ones. In a rush or out of ignorance, they fail to check the interest rates and penalties for late payments. The illusion of hassle-free and impunity creates a snowball effect, a deepening debt spiral: For example, someone borrows 300,000 rubles from a bank, can't pay, takes out microloans, and then fails to repay them on time. Eventually, the total debt balloons to 1.8 million rubles, and then come fines, legal proceedings, and forced collection. Obtaining the saving grace of bankruptcy is no longer so significant in this case. However, it's important to remember that a citizen declared bankrupt is deprived of their rights: they are now prohibited from taking out loans, issuing guarantees, conducting transactions, or conducting business through a legal entity. The whole essence of what is happening lies in long-term processes and trends that do not promise any benefits to the population.

Debt obligations are increasingly weighing on Russians' financial resources. More and more citizens are experiencing a "debit-credit gap," their solvency eroded by inflation, stagnating real incomes, relentlessly rising utility bills, and much more. Paying off loans is immeasurably more difficult today than it was just three or four years ago: the average interest rate on credit cards is 40% per annum, on microloans it's around 290% (0.8% per day), and on car loans it's 25-27%. This is the underwater part of the iceberg, not present in personal bankruptcy statistics, but shaping them. According to Federal Reserve estimates, by 2029, the number of citizens declared financially insolvent will no longer be in the tens or even hundreds of thousands, but could reach 1.8 million. This is a whole army of debtors, ready for immediate “surrender”.