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. Unable to pay debts

I am a 32 year old and have been unployed since 8 months. I also had an ailment recently that needed hospitalization and with it I spent a lot of money. I am dire broke at the moment and unable to pay the EMIs of my personal loan and my credit card dues. I get calls from banks asking me to make payments even though I've told them my situation. I received a legal notice today regarding my debt.
I am unable to get a job and unsure of how to go about it.
Should I file for bankruptcy?
Any advice would be greatly helpful!
Share this questionShare Icon

Showing 6 of 6 Responses

A. Any one who is even now earning by some provate job can file for Insolvency, You need to make a fair declaration if your assets and liabilities.

Found Helpful
Found Helpful
Share this answerShare Icon
Reply Here

A. FAQ on Insolvency and Bankruptcy Code, 2016 (IBC)
FAQ on Insolvency and Bankruptcy Code, 2016 (IBC)
The motive behind these Frequently Asked Questions is to address the basic queries of the stakeholder (Companies, Individuals, Partnership Firms, CEO, MD, Directors, professionals, students) on the Insolvency and Bankruptcy Code, 2016.
Evolution, purpose of IBC and Authorities involved:
1. What is Insolvency and Bankruptcy Code, 2016? When does it come into force?
The Bankruptcy Law Reforms Committee designed a set of processes to resolve insolvency and bankruptcy and with the suggestions of various committees, professionals and general public, the Insolvency and Bankruptcy Code, 2016 (IBC) was enacted and came into force with effect from 28th May, 2016. However, the provisions on Corporate Insolvency Resolution Process under IBC have come into effect only from 1st December, 2016.
2. What’s the purpose of framing IBC?
It was framed with the intention to expedite & simplify the process of Insolvency and Bankruptcy proceedings in India, ensuring fair negotiations between Debtor and Creditor by removing the asymmetry of debt and default information.
3. How the process is said to be expedited?
The insolvency resolution process which would otherwise take ages to conclude, shall now be completed by the Adjudicating Authority within 180 days of making the application, unless extended for 90 more days as per the provisions of the Code
4. To whom IBC is applicable?
The provisions of the IBC, 2016 are applicable to Individuals, Unlimited Partnership Firms, Limited Liability Partnerships and Companies. The provisions relating to Corporate in the Code, i.e., Limited Liability Partnerships and Companies is notified and in force w.e.f. 1st December, 2016. The provisions related to Individuals and Unlimited Partnership Firms – the Part III of IBC, 2016 is yet to be notified.

Found Helpful
Found Helpful
Share this answerShare Icon
Reply Here

A. Dear Sir,
You may apply for bankruptcy
============================================================================================================
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
Reply Here

A. You have to workout a settlement plan as the bank already started process for recovery. The terms of bankruptcy for business class, not in case of employees as after the bankruptcy you cannot be employed.

Found Helpful
Found Helpful
Share this answerShare Icon

Ambrose Leo

Experience: 9 Year(s)

Responded 8 months ago

View All Answers
Reply Here

A. Respond to their legal notice first then we will see.

Regards

Rajeev
RJ Associates
Trivandrum

Found Helpful
Found Helpful
Share this answerShare Icon

Rajeev RJ

Experience: 17 Year(s)

Responded 8 months ago

View All Answers
Reply Here

A. You have to go for settlement process and to avoid sec 138. Kindly Contact me through vidikarya.

Found Helpful
Found Helpful
Share this answerShare Icon

K Mondal

Experience: 9 Year(s)

Responded 8 months ago

View All Answers
View {{count[5]}} Reply
Placeholder image

Eddie Hazel

Experience: 1 Year(s)

Replied 8 months ago

I do not have much money left after my medical expenses. How can I go for a settlement process?

Reply
Talk to a Lawyer
Post Your Matter
Request Callback
Contact Us