dear all
i want to know regarding an individual insolvency declaration..
how can one declare himself as insolvent..
as he have no assets or cash or bank balance to repay his debts..
he is totally now depend for his livelihood on others..
he have no amount to repay bank and other creditors loans and also he his company is closed all machine became scrap and sold out..
he have no investment, no property, no residential property nothing in his name.
Dear Querist,
Since, you are unable to pay your bills and need protection from creditors, you can file for an insolvency petition.
However, you must satisfy one of the following three requirements listed below:
1. If you owe more than Rs. 500 in debt
2. If you are being held or imprisoned to carry out a money decree
3. If a current order of attachment against your property is in place to carry out such a decree
The Provisional Insolvency Act of 1920 governs the insolvency filing process.
An insolvency petition is filed at a district court who has the jurisdiction over the area in which the debtor (you) resides or conducts business.
If you are being held or have already been detained or are in custody, then the petition may be submitted where you currently are.
The Court may appoint an interim receiver following the presentation of the insolvency petition or prior to the making of an order once an insolvency petition has been filed.
The property of an insolvent person would then vest with the official assignee or the receiver and become divide up among the creditors upon the making of an order of adjudication.
Your property then would be distributed as per the priority of the debt. This is guided by the Provincial Insolvency Act of 1920. According to the Act, the following obligations are to be paid off before any other debts:
• Debts owed to any local authority or the local government;
• Rent owed to the landlord in an amount not to exceed one month's rent; Salary or pay of any clerk, servant, or labourer, not to exceed Rs. 20, for services provided to the bankrupt person during the four months prior to the date the insolvency petition was presented.
After the aforementioned payments have been made, all debts listed in the insolvency petition must be paid in accordance with their number, with no preference given to any creditors. The court may issue an absolute order of discharge following the adjudication and after considering the official assignee's or receiver's report. Except for debts owed to the government and debts incurred via fraud or a fraudulent breach of trust, the order of discharge frees the debtor from all obligations that must be paid.
