Abstract

People’s credit funds are credit institutions operating under the cooperative model and are characterized by specific features relating to membership, scope of operations, and mutual support objectives. Accordingly, the resolution of insolvency requires an appropriate legal framework to protect depositors and safeguard the stability of the credit institution system. The 2025 Law on Recovery and Bankruptcy establishes a new legal framework governing the bankruptcy of credit institutions, under which bankruptcy proceedings may be initiated after special control has been terminated, or after recovery measures have been terminated or are not applied, while the credit institution remains insolvent. This article analyzes the current legal framework governing the bankruptcy of people’s credit funds, with particular emphasis on the conditions for initiating bankruptcy proceedings, the entities entitled or obliged to file bankruptcy petitions, the handling of assets, the order of asset distribution, and the protection of depositors’ rights and interests. It also examines the relationship between special control and bankruptcy proceedings. On this basis, the article identifies shortcomings in the existing legal framework and proposes recommendations for improvement in order to enhance the feasibility and effectiveness of bankruptcy proceedings, strengthen the protection of depositors, and contribute to the stability and safety of the credit institution system.

Keywords: Bankruptcy, credit institutions, law, people’s credit funds, special control.