Bankruptcy and Insolvency advisory

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Bankruptcy law in India:

The bankruptcy law in India is The insolvency and Bankruptcy Code, 2016 (IBC) which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. Previously insolvencies was a long process and did not offer an economically viable arrangement but now resolved with a one stop solution of bankruptcy code. The main aim of code is to protect the interests of small investors and make the process of doing business less cumbersome.

To oversee the process of insolvency resolution for individuals and the companies the code proposes two separate tribunals:

• The national Company Law Tribunal for companies and Limited Liability Partnership firms
• The debt Recovery Tribunal for individuals and partnerships.

The bankruptcy law will make a stand for negotiation between creditors and external financiers which can create the possibility of such reorganizations.

Bankruptcy Lawyer:

There are two types of Bankruptcy lawyers. Consumer bankruptcy lawyers works with Individuals filing chapter 7 (straight bankruptcy) and chapter 13 ( Repayment plan) cases. Business or commercial bankruptcy lawyers works with businesses to file chapter 11 reorganization cases and chapter 7 cases. Anyone who is qualified as lawyer of bankruptcy can in general file case for individual and business but the focus is different enough that most attorneys choose one over the other. The majority of them select such lawyers who can help them through the process and ensure that they get all the benefits due them and suffer none of the drawbacks of the incautious.

Insolvency Professional Meaning:

Licenced Professionals manages the process of the insolvency. During the insolvency process, professionals also control the assets of the debtors.

Insolvency professional agency:

Under section 201 of insolvency code, 2016, any person registered with the board (IBBI) as an insolvency professional agency.

Professional standards, code of ethics and be first level regulators developed by the insolvency professional agencies for its Insolvency professional members. This will lead to development of a competitive industry for such professionals.

Insolvency Professional Eligibility:

• Individual is an Indian citizen and has attained age of 18 years.
• Is a fit person and sound mind.
• Individual is solvent and not declared as insolvent
• Has not been convicted by any competent court or law.
• Individual are required to clear the National Insolvency Examination or
• Clear the Limited insolvency examination in which case the applicant should have 15 years of experience in management after receiving a Bachelor’s degree from a university established or recognized by law or
• Has passed the limited Insolvency Examination and has 10 years of experience as –

Chartered Accountant or Company Secretary or Cost Accountant or an advocate enrolled with a Bar Council.

Bankruptcy and Insolvency:

Inspite there being difference between Bankruptcy and insolvency still people mix there terms. When a person, company or organization liabilities exceeds its assets and is unable to pay off his creditors, it is known as insolvency. Insolvency is a financial state whereas bankruptcy is a legal procedure which helps people facing insolvency to resolve their financial state with help of government.

Insolvency could be temporary and can be fixed with time. All insolvent entities might not be declared bankruptcy however all bankruptcy’s entities are said to be insolvent.