Application for Bankruptcy is filed against an individual or a partnership firm if the resolution plan for an individual does not succeed, in case of pending debt. The application may be filed by the Debtor itself as given under section 122 of the IBC code or by the creditor under section 123 of the IBC code. Both, creditors and the debtor have the right to appoint an insolvency resolution professional as the bankruptcy trustee for the purpose of bankruptcy proceedings.
Bankruptcy trustees are the ones dealing with complex situations that can arise when someone becomes insolvent. The trustee in bankruptcy effectively takes control of the assets distributes proceeds to creditors, according to the law.
A bankrupt person’s assets which may be land, building, cash, or other such assets are taken into custody by the trustee. All these assets together refer to “estate” and shall be distributed to pay off the debts. Once the legal appointment through the adjudicating authority of the bankruptcy trustee is approved, the bankruptcy trustee is responsible and handed over the complete estate.
The Bankruptcy Trustee on behalf of the Debtor shall comprise:
- Hold property, make contracts, can sue or be sued, can enter into any engagements in respect of the bankruptcy, can employ persons to assist him, can execute power attorney in its name;
- Investigate the matter of bankruptcy in depth to know the debts and assets and its valuation;
- Realize the estate of a bankrupt person;
- Distribute the estate in accordance with the debt;
- Fulfill the debt of various creditors;
- Carry on the business of the insolvent person
- bring or defend any legal action regarding the bankruptcy estate
- make compromises with creditors and settle their claims
- sell any property comprised in the bankruptcy estate, including goodwill
- Employ an agent
- Bring legal proceedings because of preferences, transactions at an undervalue, or extortionate credit transaction
How ASC helps?
With the experience of an insolvency professional, ASC is capable to arrange insolvency professionals to act as bankruptcy trustees.
- Assistance and compliance with all the responsibilities of a bankruptcy trustee
- Complete handling of the estate with efficiency and settling the claims of creditors by efficient negotiations;
- Analysis of bankruptcy situation and suggest ways to sail through it effectively, with a minimum cost;
- Maximum valuation of the estate to ensure equitable distribution and best realization value to settle off the debt;