How to File Personal Bankruptcy in India

By Indolegal |

Bankruptcy is slowly becoming more commonplace in India, but there is a lot of stigma related to it in the country. People still look down on bankruptcy as a sorry situation, while countries like the United States consider it to be a procedure for getting a fresh lease of life. In any case, a lot of people are unaware about how to file personal bankruptcy in India. If you would like to get some bankruptcy help and learn the process of filing for it, then this article will show you how. Before we begin, let’s take a look at the process of bankruptcy file in India.


Overview of Bankruptcy in India

The first step towards filling personal bankruptcy in India would be to find the right bankruptcy help. The entire process of filing for bankruptcy can be long and confusing, and you would not want the pressures of running around courts and filing petitions and applications apart from the pressure and tensions of going bankrupt. A good bankruptcy lawyer would be able to guide you on what type of bankruptcy to file. Chapter 7 and chapter 13 are the types of bankruptcy your lawyer would select. Out of these two, Chapter 7 bankruptcy is more common, and it is mostly called total bankruptcy, liquidation or insolvency in India. When you file for insolvency, the appropriate court would liquidate your assets and use them for repaying your debts. This kind of bankruptcy can also be filed by businesses. Once filed, it exempts you from your unsecured debts and keeps you safe from debt collection agencies.

Definition and Description of how to File Personal Bankruptcy in India

The process of filing for bankruptcy in India is straightforward, but it is always best if you solicit the help of a good bankruptcy lawyer. A lawyer with adequate expertise can get you the right bankruptcy forms to fill up and also examine them before and after you fill them. The lawyer can then guide you on how to file personal bankruptcy in India or complete all the documentation for you. In any case, having an expert, qualified lawyer through such a tumultuous procedure is always helpful.

The first step towards filing for personal bankruptcy would be to approach your local civil court and file a suit for personal bankruptcy. Once this is done, you would also need to submit a petition with the district court. On filing the petition, an officer would be charged with inspecting all the assets and collecting all of them except for the ones that are exempted by law. Once collected, the court would then proceed to lock down all assets until they are sold, after which the creditors would be paid back the due amount from the proceedings.

While the process might seem scary for you, the fact is that it offers several advantages. For one, declaring yourself bankrupt protects you from any direct approaches from banks and lenders for collecting money. This means no frequent phone calls from debt collectors and no threats from angry lenders. Once bankruptcy has been filed, your bankruptcy lawyer can redirect all creditors to court for settlement of debts.

Of course, an approved state of bankruptcy is not a quick fix for any of your financial problems either. For one, declaring yourself bankrupt would lead you to lose your face among Indian society. You would be considered a failure by many people around you, and you would be facing a long time of hardship. Moreover, you would also be put in the CIBIL defaulter’s list, making you less viable for loans from banks. At the end of the day, however, you still have a better chance to right your wrongs once you file for bankruptcy. While the laws of bankruptcy in India are still not adequate enough, it can be used properly by a good bankruptcy lawyer to give you a new lease of life and reset your financial situation.


One Response to How to File Personal Bankruptcy in India

  1. S.C. says:

    Hello,

    Sir, I am from india.

    My father took a lot of loan from different banks for my brother’s education. As ill luck would have it, my father was dismissed from service. so no longer he is unable to pay even the emis. we also sold everything that was left (car, home etc.) Neither he nor me or my brother has any movable or unmovable property. I am urging him to file for bankruptcy. Sadly lawyers, whom so ever we contact is not willing to take up the case. Now, a new arrest warrant came in for my father.I am also not earning enough to pay the emi. So sir please please kindly help. Please let me know in detail, how my father can apply for insolvency.

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