The Insolvency and Bankruptcy Code, 2016 ("IBC") is a law enacted with the aim of giving the debtor the opportunity to recover and providing relief to all creditors, including other stakeholders. There are 2 types of creditors under IBC, i.e. Financial creditors and operating creditors. Let's explain it to them
1. 'Financial Creditor' refers to any person to whom any financial debt relates. Financial debt as defined in U / S 5(8) of IBC means any debt that is paid out against a consideration for the time value of money, i.e. interest, and includes any other debt as described in the above section.
Example: – Whether any individual or company gives financial aid against interest to the corporate debtor, it is a financial liability. That includes homebuyers who make an advance payment to real estate developers for the reservation of some apartment / unit / property.
2. 'Operational Creditor' includes the people to whom the operating debt is owed and includes any person to whom the debt has been legally assigned or transferred. Operational debt as stated in U / S 5(21) of IBC shall mean any claims relating to the provision of goods / services / employment or payable to Government.
Example: – If any person has any outstanding or any advance relating to the purchase or sale of goods / services towards any debtor. This must have been an operating debtor.
In a recent interview dated 01/10/2018, Mr. M. S Sahoo, Chairman of the Insolvency and Bankruptcy Board of India (IBBI), claimed that, owing to IBC, Rs. 1,00,000 Crs had been recovered within 2 years of the IBC activities by IBC procedures.
Benefits should be made explicit and can be summarized as follows:
The proceedings under IBC may be initiated by filing a petition before the jurisdictional NCLT u/s 7 or 8 or 10 of IBC to begin the Corporate Insolvency Resolution Process (CIRP) of any Corporate Debtor. For more specific information, please click here
Rajput Jain & Associates is having dedicated team of Qualified Insolvency professional, who are well trained and experience in verifying the claims & supporting evidence of default, lodging a timely complaint with NCLT, filling appeals before NCLT, bringing an appeal, among others. Our services are as below;
We have a dedicated, committed & result oriented team of Qualified Insolvency Professionals having specialised knowledge & experience of this code.
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Thank you very much for all your help in setting up my new company and clearing up all outstanding business in my sole trader accounts. For the first time in years I have peace of mind regards my business accounts. Your workforce are a credit to you, the girls at reception are so helpful and Chris has been brilliant. It is very much appreciated.
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