Here's How You Can File Insolvency Petition
What is insolvency?
When an individual or any organisation is unable to repay the money owed, then the state of being in this difficult situation is called insolvency. Furthermore, when a person or an organization is in the state of insolvency, they are called insolvent.
There are two types of insolvencies –
When stepping into this game of business law, it is important that you must hire a corporate lawyer by your side. Hire the best corporate lawyer with us.
Purpose of insolvency law –
Insolvents need to understand that this is not a debt recovery tool. There’s absolutely no need to be afraid in filing for insolvency as this mechanism is made to help both insolvents and creditors.
The primary purpose of insolvency law is to maximise returns to creditors through collective payment processes. Insolvency proceedings are collective in nature and are meant to be beneficial for the entire body of debtors and creditors.
A good corporate lawyer will be able to guide you better through these processes.
Difference between Insolvency and Bankruptcy –
Insolvency is a state of economic unease and distress.
Bankruptcy on the other hand is a court order that declares, a person or an organization is broke and they need to imply certain measure to recover their debts.
Bankruptcy is a legal procedure to solve insolvency. However, the opposite can’t be the same.
In case you’re insolvent and are planning to file for bankruptcy, seek legal advice from your corporate lawyer.
Who are eligible to file for insolvency petition?
An individual can file an insolvency petition if they’re able to fulfil the following conditions:
A creditor can file insolvency petition if –
Insolvency petition can be filed at a district court. If the debtor has already been imprisoned, then the insolvency petition can be filed.
Distribution of Assets –
Provincial Insolvency Act, 1920 provides the following facilities –