MOSCOW, October 1 (RAPSI) – A law on personal bankruptcy, under which an individual can be declared bankrupt upon a creditor’s request if the total amount of debt exceeds 500,000 rubles ($7,600) took effect in Russia on October 1, RIA Novosti/Prime reported on Thursday.

The law stipulates a three-year deferment for debtors with a stable income. Otherwise, a court will declare the borrower bankrupt and distribute the property among the creditors. Borrowers would be able to file for bankruptcy themselves.

The right to file bankruptcy lawsuits would be also given to creditors or authorized agencies, in which case borrowers would be able to say that they cannot honor their obligations irrespective of the debt amount.

The law reaches car, mortgage, and consumer credits. The legislation also touches foreign currency loans.

According to experts, about 500,000 Russian citizens are expected to initiate bankruptcy proceedings.