After the resolution of Insolvency fails, provision of bankruptcy is an open procedure that has been enacted by the Insolvency and Bankruptcy code of 2016. According to the bankruptcy and insolvency act, one cannot directly apply for the bankruptcy. Rather he/she will have to get through the Insolvency procedure at first. In the course of the procedure, you will have to apply for the same within three months from the time, after the adjudicating body rules out the strand of insolvency resolution. Thus, this is another opportunity for you, after your insolvency resolution. However, that has to be made by following certain procedures, where knowledge about certain laws is to be kept into account.
Conditions when you can go for the bankruptcy provision
There are certain conditions and provisions, under which you can move for a bankruptcy case. Here are those for you. You can get the outline for that –
If your insolvency resolution case has been rejected by the jury under Sec 100(4), you can take the help of insolvency and bankruptcy law and file the bankruptcy case. This section states that the insolvency resolution has been denied for the reason that it was filed for defrauding the creditors.
If your repayment plan that has been submitted has been rejected under the Sec 115(2), then you can file with the bankruptcy case, without any other issues.
The third procedure to go for a bankruptcy settlement is according to the Sec 118(3), which states that the repayment plan that has been resolved by you has remained a failure.
3 Steps to apply for Bankruptcy
The case of Bankruptcy has to be filed under the Sec 122(1) of the insolvency law in india and hence the application has to be made in accordance to the format prescribed by the act. Along with that the fee for submitting the format has also to be filled.
The fees can be filled either by the debtor or even by the creditor. In case you justify yourself as an unsecured Creditor under the Sec 123(1) of the act, you will have to submit the format and also produce the documents that has been prescribed by the section. In other cases, that is when you are coming under the banner of Secured Creditor, which has been stated at the Sec 123(2), the documents that you will be submitting must fulfill the condition.
You can also propose to the jury a bankruptcy law lawyer who will be acting as a bankruptcy trustee for you. The conditions, he/she will be fulfilling can be checked from the Sec 125 of the act. You can get in touch with some of the bankruptcy law lawyers who will be assisting you in the affair.
You can even withdraw the application from the Authority and according to the provision that has been mentioned in the Sec 123(7), you will not even have to take permission from anyone for doing the same. The trustee that you will be proposing for your assistance must have to be appointed after the approval of your submitted documents, which is checked and authorized by the IBBI. After you found the approval from the authority for the procedure of the case, the trustee will be taking the charge of the estate and will be defending you as according to the sec 79(9) of the bankruptcy law in india.
This is the entire procedure that you will be following in the case of Bankruptcy. Now, your part has been completed. So, it is better for you to know about the process of the proceeding of the case, which has been discussed below –
The procedure of Bankruptcy case
After the completion of the procedure from your part, there is the need of confirmation from the end of the bankruptcy trustee, which is represented by the bankruptcy law lawyer appointed by you. The adjudicating body will be taking care about the confirmation of the trustee and will declare bankruptcy within 14 days of that confirmation. The copy of the declaration will be forwarded to the bankrupt or the debtor, the credioftor and also to the trustee. All of the proceedings then will be in discretion for the debtor, in accordance to the Sec 138 of the bankruptcy law in india.
The proceedings that will be followed thereafter are as follows –
The venture of the bankrupt will be vested in the presence of the trustee under the sec 154 of the bankruptcy and insolvency act and after that,
the estate will be segmented among the creditors.
The act even states the differential features that are related to the act, which includes the charges that the trustee can claim from you. This has been provisioned by the sec 144 (1) of the act and the sections starting from 137 till 148(3) states the duty that the trustee will be performing in the due course. Hence, once those duties are fulfilled, he/she can be released from duty.
This is all that you need not know about bankruptcy and insolvency act and once you have this complete idea, you can easily go for the bankruptcy declaration after the insolvency. You can consult with some bankruptcy lawyers in india who will be assisting in the case, starting from the insolvency. What you can get and what options you have in the due course of the proceeding, all will be supported by the lawyer for your assistance, ensuring the completion of the procedure with ease.