Insolvency and bankruptcy are both different but interrelated terms in India. Insolvency is a stage of business where debts are more than assets of the companies, and bankruptcy is a process that provides a legal way to handle the insolvency stage in business. The process of insolvency and bankruptcy is governed by the Insolvency and Bankruptcy Code, 2016 in India. Insolvency process is filled with multiple legal compliance,to handle these processes effectively, taking legal assistance is very helpful for business owners and companies. In the bankruptcy and insolvency process involves multiple steps, like the stage of insolvency of the company, then declaration of bankruptcy, moratorium, resolution plan, liquidation, creating a committee of creditors, and a new start of business.
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Bankruptcy and insolvency lawyers analyze the cases and check whether the company qualifies for insolvency under IBC, help the parties in drafting and filling petitions for insolvency, and also represent clients in NCLT and DRT. They also help in the verification of creditors claims, provide legal assistance, and help in the bankruptcy and insolvency process. As well as lawyers, protect parties interests in asset liquidation and resolution plan preparation in India.
Frequently Asked Questions
What is the cost of bankruptcy and insolvency lawyers in India?
The cost of bankruptcy and insolvency lawyers is not fixed; it differs for each case and proceeding. It depends on the nature and complexities of the case. Also, it depends on the lawyers experiences and track records in India.
Which qualities are required in bankruptcy and insolvency lawyers in India?
Before choosing lawyers, check the lawyers experiences in representing cases in NCLT, filling insolvency petitions under IBC, knowledge of the IBC and its recent amendments, strong drafting and negotiation skills, and knowledge of using insolvency tools in India.
Which documents required lawyers in the bankruptcy process in India?
Insolvent companies need to submit the previous year’s ITR, a list of creditors, loan agreements, bounced cheques, defaulters notices, identity proof, and, if available, prior litigation or arbitration decision documents in India.
Are the terms "bankruptcy" and "insolvency" the same in India?
No, bankruptcy and insolvency are both different terms. Insolvency is an economic condition of any company or business. Bankruptcy is a legal process that helps businesses or companies to deal with insolvency in India.
How to hire the best bankruptcy and insolvency lawyers in India?
You can search the list of lawyers on bankruptcy and insolvency on the Right To Law website, where we provided a list of lawyers who have prominent experience in handling the insolvency and bankruptcy process. You can choose from that list according to your requirements and budget.
What are the rights of creditors in Bankruptcy and insolvency process in India?
In the insolvency and bankruptcy process, creditors have various rights, like taking the initiative for starting the process, making decisions in this process, voting rights, and taking protection against the fraudulent activities of the debtors.
What are the primary objectives of the IBC Act in India?
Main obajctive of IBC is the secured the interest of stakeholders, maximize asset valuations, boost the entrepreneurship in India and provide legal process to solve the problem insolvany in time bound manner.
Who are the stakeholders in the insolvency and bankruptcy proceedings in India?
Stakeholders means operational or financial creditors, shareholders, corporate debtors, and resolution applicants. These stakeholders have varying interests and rights in the resolution and liquidation processes of insolvent companies in India.
What is the time period for completion of the insolvency and bankruptcy process in India?
The main aim of the IBC is to provide a time-bound process, so as per the law, it generally takes 180 days; if needed, then process get 90 days extension, maximum limit for completion of these processes is extend upto 330 days in India.
What is the final stage of the insolvency process in India?
In the process of insolvency, the last step is either resolution, where the resolution plan is approved and the company restarted, or the resolution plan is not approved, then liquidation, where company assets are sold for repayment of creditors.