Russia is preparing for a wave of bankruptcy applications after a new law came into force Thursday allowing individuals to file for bankruptcy.

Between 400,000 and 500,000 people are eligible to file for bankruptcy under the law, the central bank's deputy chairman Vasily Pozdyshev said in a statement Wednesday, allowing them to "solve the problem of being persecuted by creditors."

Previously, bankruptcy only applied to legal entities, meaning individuals could be pursued non-stop over debts.

Newly bankrupt Russians are banned from running companies for three years, and may be prevented by court order from leaving the country during bankruptcy proceedings.

According to the central bank, 1.09 trillion rubles ($16.7 billion) of loans to individuals were at least three months behind on payments in August, or 10.5 percent of the total.