SHENZHEN’S legislature Tuesday unveiled a draft regulation on allowing personal bankruptcy, seeking suggestions from the public.

The legislation over personal bankruptcy, said to be the first of its kind in China, will allow an individual to be declared bankrupt through a legal procedure and enable debtors to receive a discharge after handing in all of their assets for repayment.

At a deliberation over the draft of the legislature in May, lawmakers said the legislation is to create a mechanism for healthy market exits, creating a leading business environment under the rule of law and further fueling entrepreneurial spirit.

The effort is to establish a system for people unable to repay debt because so far there is no bankruptcy protection for individuals. Founders and managers of startups and other small businesses generally must provide personal or family assets as collateral when taking out bank loans.

The absence of personal bankruptcy laws make them vulnerable to market risks. Holding entrepreneurs personally liable for business debts is harmful to the enthusiasm of startups.

The draft is said to provide follow-up guarantees for honest, but unfortunate debtors when they face a business crisis, encourage entrepreneurship and bring vitality to economic activities.

The public can see the draft at the websites of http://www.szrd.gov.cn, www.sz.gov.cn and www.sznews.com and mail back suggestions to the office of Legislative Affairs Committee of the Standing Committee of Shenzhen Municipal People’s Congress by June 18 at Room 211, Section A of Shenzhen Civic Center, or email to fzwyh@szrd.gov.cn.

(Han Ximin)