Arbitration notice received from bank
6 months ago
I am employee Delhi metro but my Liabilities are almost 25 lakhs.
Thus I can't pay all EMI on schedule time.
I paid only salary account personal loan amount and salary account credit card dues.
Also I received an arbitration notice from bank on 03/10/23.
So what, filing a insolvency and bankruptcy case, is the way to get relief from this stress and burden.
How can I file this case of insolvency and bankruptcy
A.Dear Client,
Once the EMI against a loan is not repaid for consecutive 3 times by the borrower for any reason whatsoever, it is treated as NPA. Accordingly, the Bank sends notice u/s.21 of Arbitration and Conciliation Act, 1996 to the Borrower asking him/her for repayment of the entire dues lying against your loan offering suitable terms of settlement through an arbitration process. In the absence of any response from the Borrower, they started the routine process of action prescribed under relevant laws for recovery of debt lying outstanding against the Borrower and the Guarantor. You can make a prayer to the Bank for some more time to settle the dues but cannot escape yourself from your liability of repayment of your loan for any reason whatsoever. The bank can initiate both civil and criminal suits for recovery of loan from the Borrower. As regards, filing an insolvency and bankruptcy case, it is to inform you that under the Provincial Insolvency Act,1920, you can file for bankruptcy if you are unable to repay a debt greater than ₹500. After analyzing whether the conditions for filing of bankruptcy have been met, the court may accept or reject the application. Until the decision on the application is taken, an interim receiver takes possession of the property of the debtor. If the application is admitted, the court can apply a stay on any legal proceedings against the property or assets of the debtor. In other words, you can get a stay order against further recovery efforts by your creditors. Once your application is admitted, your property vests with the “receiver" appointed by the court. This official then distributes your assets among the creditors, unless a compromise proposed by you has been accepted by your creditors and the court. Once this process is completed, you will be “discharged from bankruptcy" by the court, giving you the opportunity to build your financial status afresh, without being hounded by your previous creditors. Further, a quick counseling session with a certified credit counselor can help you discover your options and choose the right path forward to resolve the crisis.
Once the EMI against a loan is not repaid for consecutive 3 times by the borrower for any reason whatsoever, it is treated as NPA. Accordingly, the Bank sends notice u/s.21 of Arbitration and Conciliation Act, 1996 to the Borrower asking him/her for repayment of the entire dues lying against your loan offering suitable terms of settlement through an arbitration process. In the absence of any response from the Borrower, they started the routine process of action prescribed under relevant laws for recovery of debt lying outstanding against the Borrower and the Guarantor. You can make a prayer to the Bank for some more time to settle the dues but cannot escape yourself from your liability of repayment of your loan for any reason whatsoever. The bank can initiate both civil and criminal suits for recovery of loan from the Borrower. As regards, filing an insolvency and bankruptcy case, it is to inform you that under the Provincial Insolvency Act,1920, you can file for bankruptcy if you are unable to repay a debt greater than ₹500. After analyzing whether the conditions for filing of bankruptcy have been met, the court may accept or reject the application. Until the decision on the application is taken, an interim receiver takes possession of the property of the debtor. If the application is admitted, the court can apply a stay on any legal proceedings against the property or assets of the debtor. In other words, you can get a stay order against further recovery efforts by your creditors. Once your application is admitted, your property vests with the “receiver" appointed by the court. This official then distributes your assets among the creditors, unless a compromise proposed by you has been accepted by your creditors and the court. Once this process is completed, you will be “discharged from bankruptcy" by the court, giving you the opportunity to build your financial status afresh, without being hounded by your previous creditors. Further, a quick counseling session with a certified credit counselor can help you discover your options and choose the right path forward to resolve the crisis.
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A.Dear Client,
To file for personal insolvency in India, you must meet certain eligibility criteria as per the IBC. Generally, you should be a debtor with a minimum outstanding debt amount to trigger the process. Before initiating insolvency proceedings, you are required to undergo financial counseling. You can approach a credit counselor or insolvency professional to assess your financial situation and explore options for resolving your debt without going through insolvency. If financial counseling doesn't provide a suitable solution, you can file a personal insolvency petition before the National Company Law Tribunal (NCLT) or the Debt Recovery Tribunal (DRT), depending on your case. Once your petition is accepted, the NCLT/DRT will appoint an insolvency professional (IP) to oversee the process. The IP will work with you and your creditors to develop a repayment plan. After the initiation of insolvency proceedings, there is a moratorium period during which creditors cannot take legal action against you to recover debts. This period provides you with some relief. The IP will work with you and your creditors to create a repayment plan, which may involve restructuring your debts, selling assets, or liquidating assets to pay off creditors. The proposed repayment plan must be approved by a majority of your creditors. If approved, it becomes binding on all parties involved. Once the repayment plan is successfully executed, and all debts are settled according to the approved plan, the insolvency proceedings will be completed. After successfully completing the process, you will receive a discharge, and you will no longer be liable for the discharged debts.
To file for personal insolvency in India, you must meet certain eligibility criteria as per the IBC. Generally, you should be a debtor with a minimum outstanding debt amount to trigger the process. Before initiating insolvency proceedings, you are required to undergo financial counseling. You can approach a credit counselor or insolvency professional to assess your financial situation and explore options for resolving your debt without going through insolvency. If financial counseling doesn't provide a suitable solution, you can file a personal insolvency petition before the National Company Law Tribunal (NCLT) or the Debt Recovery Tribunal (DRT), depending on your case. Once your petition is accepted, the NCLT/DRT will appoint an insolvency professional (IP) to oversee the process. The IP will work with you and your creditors to develop a repayment plan. After the initiation of insolvency proceedings, there is a moratorium period during which creditors cannot take legal action against you to recover debts. This period provides you with some relief. The IP will work with you and your creditors to create a repayment plan, which may involve restructuring your debts, selling assets, or liquidating assets to pay off creditors. The proposed repayment plan must be approved by a majority of your creditors. If approved, it becomes binding on all parties involved. Once the repayment plan is successfully executed, and all debts are settled according to the approved plan, the insolvency proceedings will be completed. After successfully completing the process, you will receive a discharge, and you will no longer be liable for the discharged debts.
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