Start of personal insolvency of new learning, says Sahoo
New Delhi, December 1 () The personal insolvency framework will be the beginning of new learning and the next big news in insolvency reforms, said IBBI chief M. S Sahoo.
Starting with a small group of individuals, the framework under the Bankruptcy and Insolvency Code (IBC) for personal guarantors of corporate debtors entered into force as of December 1.
Sahoo, president of the Insolvency and Bankruptcy Board of India (IBBI), stressed that the insolvency resolution of personal guarantors complements the insolvency resolution of corporate debtors.
Personal insolvency is the next big news in insolvency reforms. It will be the beginning of new learning, he said in a recent interview.
In the past three years, Sahoo said he was learning about corporate insolvency and in the next three years, we will invest in learning personal insolvency.
The IBC became effective as of December 2016.
We intend to move forward gradually to cover the insolvency of companies and property companies and others, he said.
According to the IBC, individuals are classified into three classes: personal guarantors of corporate debtors, associated firms and proprietary firms, and other individuals.
There are times when a corporate debtor takes a loan secured by another corporate person (corporate guarantor of the corporate debtor) or an individual (personal guarantor of the corporate debtor).
The lender can seek a remedy against the guarantor or the corporate debtor, being the principal borrower, when there is a default on the repayment of the loan, Sahoo said.
According to the IBC, when a request for insolvency resolution or liquidation procedure of a corporate debtor is pending before the National Court of Corporate Law (NCLT), a request related to the resolution of insolvency or liquidation or bankruptcy of a corporate guarantor or A personal guarantor may also be presented in court. ... the procedure of resolution of insolvency, liquidation or bankruptcy of a corporate guarantor or a personal guarantor of the corporate debtor pending in any court or tribunal shall be transferred to the NCLT that deals with the insolvency resolution or the liquidation procedure of said corporate debtor The Ministry of Affairs had said in a statement in November. RAM BAL BAL