Insolvency resolution process for individuals and partnership firms

A Panvel contractor signs a personal guarantee for his company's loan. The company collapses, the bank turns to him, and he owns a flat, a car and a little gold. He is not hopeless; he can pay something over a few years if the bank will wait. Must he be declared bankrupt, or can he and his creditors agree on a schedule? Chapter III of Part III, the insolvency resolution process for individuals and partnership firms, is the Code's answer: negotiate a repayment plan first, and bankruptcy only if that fails.

In two minutes

The insolvency resolution process in ss.94–120 lets a debtor or creditor start a supervised negotiation in which a resolution professional helps the debtor and creditors agree a repayment plan, approved by more than three-fourths in value of the creditors voting.

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