What Is Insolvency and Bankruptcy in India

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Insolvency Bankruptcy
Presented By Registrationwala
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What is Insolvency

• Insolvency is a state of being where an entity is
  not able to repay the debts to its creditors
  within the prescribed time
• The insolvent entity/insolvent debtor can either
  be a person or a company
• If the debtor is a company, then they are
  referred to as corporate debtors
• The creditors can either be operational or
  financial creditors

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What is Bankruptcy

• Bankruptcy refers to a declaration of insolvency
• It is only after this declaration that the
  Insolvency and Bankruptcy Board of India steps in
• Bankruptcy declaration can either be filed by the
  debtor or the creditors
• When bankruptcy is declared, insolvency
  resolution process is initiated.

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Insolvency In Business

• Insolvency in business refers to when a company
  has gone insolvent.
• It is a case when the company is not able to pay
  operational or financial credit.
• When a business goes insolvent, the employees of
  that business suffer.
• Not being able to pay the employees is an example
  of inability repay operational credit.

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What Happens When A Company Becomes Insolvent

• After a company becomes insolvent, either they or
  the operational/financial creditors can file to
  initiate the insolvency resolution process.
• The form used to file this petition comes under
  section 9.
• If the form is accepted, the insolvency
  resolution process initiates.
• At the end of the resolution, either the company
  is sold or the assets of the power point debtor
  are liquidated.

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what-is-insolvency-and-bankruptcy/
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What Is Personal Insolvency

• If the insolvent entity is a single person, then
  it is the case of personal insolvency.
• The matter of personal insolvency is handled by
  Debt Recovery Tribunal.
• Personal insolvency does not take much time to be
  resolved.
• Personal insolvency can lead to the need of
  personal assets to be liquidated.

Personal Insolvency
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