With new bankruptcy laws, who all can file for bankruptcy?
As per the newly introduced Insolvency and Bankruptcy Code 2016 all individuals, companies, limited liability partnerships and partnership firms are covered under the new regulation and can
file for bankruptcy as and when faced with such an extreme situation.
How will the new bankruptcy bill benefit individuals?
For insolvency resolution individuals can opt between a fresh start and insolvency resolution mechanism. Under fresh start debtors can apply to the debt recovery tribunals for discharge of debts up to a certain threshold limit. On the other hand for insolvency resolution, individuals can
get a repayment plan prepared by insolvency resolution experts failing which they may even apply for a bankruptcy order.
The Insolvency and Bankruptcy Code, 2016 (IBC) serves as the bankruptcy law in India. This law aims to consolidate the existing framework by creating a single law for insolvency and bankruptcy. The code gives a uniform, comprehensive insolvency legislation that will encompass all companies (other than financial firms), partnership firms, and individuals. The Government has proposed a separate framework for bankruptcy resolution that will apply to failing banks and other financial sector entities.