Menu
keyboard_backspace
ask a question ask a question
Get Realtime Updates of your Request. Download Vidhkarya App

Ask a Question - Free Legal Advice

Q. Insolvency

Placeholder image

Anonymous

posted 4 months ago

Sir please give legal advice to give insolvency
No income from 3 months , harassment from loan recovery team
Share this questionShare Icon

Showing 5 of 5 Responses

A. dear client kindly file insolvency suit.declared yourself as insolvent.

Found Helpful
Found Helpful
Share this answerShare Icon

Deepak Bade

Experience: 9 Year(s)

Responded 3 months ago

View All Answers
Reply Here

A. you have not mentioned the full facts.
For details, pl. contact some advocate through vidhikarya.com

Found Helpful
Found Helpful
Share this answerShare Icon

Rajender Prasad

Experience: 5 Year(s)

Responded 4 months ago

View All Answers
Reply Here

A. The Insolvency And Bankruptcy Code, 2016 - Key Highlights


Dear Sir,

The provisions of Bankruptcy and insolvency Act may be used to get relevant certificate. The highlights of the Act are as follows followed by a link.

KEY HIGHLIGHTS

1. Corporate Debtors: Two-Stage Process

To initiate an insolvency process for corporate debtors, the default should be at least INR 100,000 (USD 1495) (which limit may be increased up to INR 10,000,000 (USD 149,500) by the Government). The Code proposes two independent stages:

Insolvency Resolution Process, during which financial creditors assess whether the debtor's business is viable to continue and the options for its rescue and revival; and

Liquidation, if the insolvency resolution process fails or financial creditors decide to wind down and distribute the assets of the debtor.

(a) The Insolvency Resolution Process (IRP)

The IRP provides a collective mechanism to lenders to deal with the overall distressed position of a corporate debtor. This is a significant departure from the existing legal framework under which the primary onus to initiate a reorganisation process lies with the debtor, and lenders may pursue distinct actions for recovery, security enforcement and debt restructuring.

The Code envisages the following steps in the IRP:

(i) Commencement of the IRP

A financial creditor (for a defaulted financial debt) or an operational creditor (for an unpaid operational debt) can initiate an IRP against a corporate debtor at the National Company Law Tribunal (NCLT).

The defaulting corporate debtor, its shareholders or employees, may also initiate voluntary insolvency proceedings.

(ii) Moratorium

The NCLT orders a moratorium on the debtor's operations for the period of the IRP. This operates as a 'calm period' during which no judicial proceedings for recovery, enforcement of security interest, sale or transfer of assets, or termination of essential contracts can take place against the debtor.

(iii) Appointment of Resolution Professional

The NCLT appoints an insolvency professional or 'Resolution Professional' to administer the IRP. The Resolution Professional's primary function is to take over the management of the corporate borrower and operate its business as a going concern under the broad directions of a committee of creditors. This is similar to the approach under the UK insolvency laws, but distinct from the "debtor in possession" approach under Chapter 11 of the US bankruptcy code. Under the US bankruptcy code, the debtor's management retains control while the bankruptcy professional only oversees the business in order to prevent asset stripping on the part of the promoters.

Therefore, the thrust of the Code is to allow a shift of control from the defaulting debtor's management to its creditors, where the creditors drive the business of the debtor with the Resolution Professional acting as their agent.
Part III of the Insolvency and Bankruptcy Code, 2016, deals with insolvency and bankruptcy of individuals and partnership firms.
According to a statement issued by IBBI on Tuesday, the draft rules and regulations have been submitted by a working group which was formed to recommend the strategy and approach for implementation of the provisions of the Insolvency and Bankruptcy Code, 2016, dealing with insolvency and bankruptcy in respect of guarantors to corporate debtors, i.e., personal guarantors, and individuals having businesses.
http://www.mondaq.com/india/x/492318/Insolvency+Bankruptcy/The+Insolvency+And+Bankruptcy+Code+2016+Key+Highlights
To
All Registered Insolvency Professionals
All Registered Insolvency Professional Agencies
(By mail to registered email addresses and on web site of the IBBI)
Dear Madam / Sir,
Sub: Fees payable to an insolvency professional and to other professionals appointed by an insolvency professional.
Section 206 of the Insolvency and Bankruptcy Code, 2016 (Code) provides that only a person registered as an insolvency professional with the Insolvency and Bankruptcy Board of India (IBBI) can render services as an insolvency professional under the Code. Section 23 read with section 5(27) of the Code requires that an insolvency professional, who is appointed as an interim resolution professional or a resolution professional, shall conduct the entire corporate insolvency resolution process, including fast track process. In terms of section 5(13) of the Code, ‘the fees payable to any person acting as a resolution professional’ is included in ‘insolvency resolution process cost’, which needs to be paid in priority.
2. The Code of Conduct for Insolvency Professionals under the IBBI (Insolvency Professionals) Regulations, 2016 require that an insolvency professional must provide services for remuneration which is charged in a transparent manner, and is a reasonable reflection of the work necessarily and properly undertaken. He shall not accept any fees or charges other than those which are disclosed to and approved by the persons fixing his remuneration.
3. In view of the above, it is clarified that an insolvency professional shall render services for a fee which is a reasonable reflection of his work, raise bills / invoices in his name towards such fees, and such fees shall be paid to his bank account. Any payment of fees for the services of an insolvency professional to any person other than the insolvency professional shall not form part of the insolvency resolution process cost.
4. Similarly, any other professional appointed by an insolvency professional shall raise bills / invoices in his / its (such as registered valuer) name towards such fees, and such fees shall be paid to his / its bank account.
5. This circular is issued in exercise of powers under section 196 read with section 208 of the Insolvency and Bankruptcy Code, 2016.
Yours faithfully,
-Sd-
(I. Sreekara Rao)
Deputy General Manager
Email: sreekararao@ibbi.gov.in

Found Helpful
Found Helpful
Share this answerShare Icon

Kishan Dutt Kalaskar Retired Judge

Experience: 33 Year(s)

Responded 4 months ago

View All Answers
Reply Here

A. Dear Client,
Please have look to the following:
What happens when you become insolvent?
When you're bankrupt, your non-essential assets (property and possessions) and excess income are used to pay off your creditors (those you owe money to). At the end of the bankruptcy period, most debts are 'discharged' (cancelled).
Can an individual be declared as insolvent?
Bankruptcy is the term used for individuals. Because sole traders and partners have personal liability for their debts, they can be declared bankrupt. Companies are legal entities and liability for debt remains within the company. Companies cannot be declared bankrupt, but insolvent.
When Insolvency Petition can be Filed by an Individual
An individual can file an insolvency petition if he/she is unable to pay his/her debts on fulfillment of any of the following three conditions:
# Debts amount to more than Rs.500
# Individual is under arrest or imprisonment in execution of a money decree
# there is an subsisting order of attachment against his/her property in execution of such decree
Shanti Ranjan Behera
Advocate

Found Helpful
Found Helpful
Share this answerShare Icon

Shanti Ranjan Behera

Experience: 22 Year(s)

Responded 4 months ago

View All Answers
View {{count[3]}} Replies
Placeholder image

Anonymous

Replied 4 months ago

Dear sir
Can u please tell me process for file suit for insolvency, iam very much disturbed by loan recovery team , they are not accepting the situation, bank people are not bothered to settle my issue

Placeholder image

Shanti Ranjan Behera

Experience: 22 Year(s)

Replied 4 months ago

Dear Client,
1.Share your complete information /case history including your location.
On hearing I may be interested.
Other alternative to get in touch with Vidhikarya.com who can arrange an Advocate
for you.
Even if I work, I will be working through Vidhikarya.com only
Shanti Ranjan Behera
Advocate

Reply

A. Dear u can file insolvency suit.

Found Helpful
Found Helpful
Share this answerShare Icon

Rameshwar Dadhe

Experience: 2 Year(s)

Responded 4 months ago

View All Answers
Reply Here