IBC FOR CREDITORS
Insolvency and Bankruptcy Code, 2016 (“IBC”) is the law enacted with the objective to give a revival opportunity to the debtor and provide relief to all creditors including other stakeholders. Under IBC there are 2 types of creditors i.e. Financial Creditors and Operational Creditors. Let’s explain them
- ‘Financial Creditor’ means any person to whom any financial debt is owned. Financial debt as defined u/s 5(8) of IBC means any debt which is disbursed against the consideration for the time value of money i.e. interest and includes other as described in above section.
Illustration: – If any person or any corporate person provides financial assistance to the corporate debtor against the interest, it shall be a financial debt. It includes the homebuyers who make an advance payment to real estate developers for the booking of any flat/unit/property.
- ‘Operational Creditor’ means a person to whom an operational debt is owed and includes any person to who such debt has been legally assigned or transferred to. Operational debt as defined u/s 5(21) of IBC means any claim relating to the provision of goods/service/employment or payable to Government.
Illustration: – If any person has any outstanding or given any advance related to purchase or sales of goods/services to any debtor. It would be operational debtor.
Benefits to Creditors under IBC
In a recent interview dated 01/10/2018, Mr. M S Sahoo, Chairman, Insolvency and Bankruptcy Board of India (IBBI), has said that due to IBC, Rs. 1,00,000 Crs has been recovered within 2 years of its IBC operations, through the IBC procedures.
Benefits can clear and can be summarized as under:
- Easy and time-bound process for filing the petition
- Complete transparency through information utility
- Time-bound process to get the recovery and related process
- Good synchronization between NCLT and IBBI
- Timely recovery of money with interest
- Timely identification of distress assets
How to start the IBC process
The process under IBC can be started by filing the petition before jurisdictional NCLT u/s 7 or 8 or 10 of IBC, to initiate Corporate Insolvency Resolution Process (“CIRP”), of such Corporate Debtor. For more complete information, please click ………………………………
How Centrik would help you?
IBC team of Centrik is well experienced in Identifying the creditor and proof for defaults, the filing of the petition with IBC, argument before NCLT, the filing of appeal and others. We have a team of experts in this particular arena of law and provide the committed and result-oriented solutions for every situation. Even we have the highly qualified Insolvency Professionals who are well proficient in Insolvency Laws and have a good amount of experience dealing in such cases. Please get in touch with our expert at firstname.lastname@example.org or 8383011629