Best Bankruptcy & Debt Lawyers in Aurangabad

About Bankruptcy & Debt Law in Aurangabad, India

Bankruptcy and debt laws in Aurangabad, India, provide legal frameworks for individuals and businesses struggling with insolvency and financial distress. These laws are designed to offer relief to debtors who cannot repay their debts while ensuring that creditors are treated fairly. The primary legislation governing insolvency and bankruptcy in Aurangabad includes the Insolvency and Bankruptcy Code, 2016 (IBC). The IBC consolidates earlier laws on corporate and individual insolvency, establishing a uniform process for resolving insolvency and liquidating assets if necessary.

Why You May Need a Lawyer

Bankruptcy and debt issues can be complex and emotionally taxing. You may require legal assistance in the following common situations:

• Filing for bankruptcy under the Insolvency and Bankruptcy Code (IBC)
• Negotiating with creditors to restructure or settle debts
• Challenging or contesting creditor claims in court
• Guidance on securing and protecting assets during financial distress
• Representation during insolvency resolution processes
• Understanding and complying with all required legal documentation and procedures
• Navigating complex financial transactions and avoiding fraudulent practices

Local Laws Overview

The key aspects of local laws in Aurangabad relevant to bankruptcy and debt include:

• Insolvency and Bankruptcy Code, 2016 (IBC): Establishes a comprehensive framework for insolvency resolution processes for individuals and companies.
• SARFAESI Act, 2002: Allows banks and financial institutions to auction residential or commercial properties to recover loans.
• Debt Recovery Tribunal (DRT): Tribunal specifically established to handle cases related to debt recovery for banks and financial institutions.
• Corporate Insolvency Resolution Process (CIRP): Process specific to corporate debtors under the IBC, involving resolution professionals and the National Company Law Tribunal (NCLT).
• Personal Insolvency: Legal procedures under the IBC that apply to individuals who are unable to repay their debts.

Frequently Asked Questions

What is bankruptcy?

Bankruptcy is a legal proceeding involving a person or business unable to repay outstanding debts. The process begins with a petition filed by the debtor or creditors and leads to the liquidation or reorganization of assets to repay debts.

How does the Insolvency and Bankruptcy Code (IBC) work?

The IBC lays down insolvency procedures for individuals, partnerships, and corporations. It initiates a resolution process to either rehabilitate the debtor or declare them bankrupt and liquidate their assets.

What is the role of a Resolution Professional?

A Resolution Professional (RP) manages the corporate debtor's affairs, assets, and finances during the Corporate Insolvency Resolution Process (CIRP). They are appointed by creditors and approved by the National Company Law Tribunal (NCLT).

How long does the insolvency resolution process take?

The CIRP should be completed within 180 days, which can be extended by a maximum of 90 days if approved by the NCLT.

Can individuals file for insolvency under the IBC?

Yes, individuals and partnerships can file for insolvency if they are unable to repay debts exceeding INR 1,000.

What are the consequences of being declared bankrupt?

Being declared bankrupt can lead to the liquidation of assets to repay debts, a restriction on holding certain positions in companies, and loss of creditworthiness.

How can a lawyer help in debt recovery?

A lawyer can help negotiate settlements, represent clients in tribunals or courts, file recovery suits, and help with arbitration and conciliation proceedings.

What is the SARFAESI Act?

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act allows banks and financial institutions to recover overdue loans by auctioning the secured assets of borrowers.

What happens if I default on loan payments?

If you default on loan payments, lenders may take legal action to recover the loan amount, which can include initiating recovery proceedings under the IBC or SARFAESI Act.

Can debt settlement affect my credit score?

Yes, settling a debt for less than the full amount owed can negatively impact your credit score as it indicates an inability to pay the full debt amount.

Additional Resources

Below are some additional resources that can be helpful:

• Ministry of Corporate Affairs (MCA): Provides resources and guidelines on insolvency and bankruptcy.
• National Company Law Tribunal (NCLT): Handles corporate insolvency resolution cases.
• Insolvency and Bankruptcy Board of India (IBBI): Regulates insolvency professionals and processes.
• Debt Recovery Tribunals (DRTs): Handles cases related to the recovery of debts.
• Legal Aid Centres: Offer free or low-cost legal assistance to those in need.

Next Steps

If you need legal assistance in bankruptcy and debt issues, consider the following steps:

• Consult with a legal professional specializing in bankruptcy and debt law to understand your options.
• Gather all necessary financial documents, including loan agreements and any correspondence with creditors.
• Discuss your situation openly with your lawyer to identify the best course of action.
• Follow legal procedures and deadlines meticulously to avoid further complications.
• Consider seeking financial counseling to manage finances better and prevent future insolvency issues.