Introduction of Insolvency and Bankruptcy Code has drastically restructured the current situation of debtor and creditor equation. Post implementing the code creditors are not needed to pursuit the debtor, the situation has reversed now. The insolvency resolution process for individuals includes filing of an application for insolvency by paying requisite fees and following the valuation procedure. National company law tribunal protects individuals and companies in managing insolvency and bankruptcy issues.
Filing of Application for Insolvency:
- Application form in case of the Insolvency resolution process for individuals should be filled in agreement with other creditors.
- Application form in case of an Insolvency resolution process for individuals should be filed by the resolution professional.
- Debtor could commence with insolvency proceedings in favor of himself by applying individually or through a resolution professional.
- Insolvency Application should include desired documents as described in the code.
- Creditor must produce a copy of the application filed to the debtor.
- The individual shall sure that the application form in the exact format as prescribed in the code.
Insolvency Resolution Process includes:
- Repayment Plan: Insolvency professional usually drafts a repayment plan that will provide a strategy to individuals restructure their debts. Insolvency professionals have powers of running a business, recognizing assets and managing the disposal of assets.
- Insolvency professional’s Report: Report submitted by resolution professional must comprise of repayment plan as strategized by professional within a given period of 20 days from the filing of claims.
- Arranging Meeting of Committee of Creditors: Once the report on a repayment plan is given then notification for a meeting of the committee of creditors shall be communicated prior fourteen days to finalize the meeting.
- Organizing Meeting of Committee of Creditors: The meeting shall be conducted in the place as decided by the debtors and the creditors in a way it has been described in the code. After the meeting of the committee of creditors, the parties may Favour, change or discard the repayment plan as drafted by the resolution professional which is an Insolvency Resolution Process for Individuals. Post-meeting of creditors, creditors would be qualified to vote for the share allocated to them. Resolution professionals will decide the voting capacity and procedure. The secured creditors would be qualified to contribute and elect in the organized meeting.
- Obtaining Consent of Creditors on Repayment Plan: For conducting business activities it is essential to obtain the consent of creditor on behalf of the debtor. Consent of the majority that is three fourth vote is necessary to prove the majority of the vote. To be present personally or on behalf of proxy is a compulsory need for obtaining the consent of a repayment plan or any further changes in the repayment plan.
Insolvency and Bankruptcy code simplified the rules for handling insolvency matters seamlessly wherein insolvency matters are managed efficiently. Creditors are assured that they will anyhow achieve the desired debts, Insolvency Resolution Process for Individuals will be effective for the realization of the debts.