Indian Bankruptcy laws

I have been hearing again and again of people driven to suicide by loan collectors or in this peculiar news, defaulters killing their bankers.

But have you noticed one thing in common among all these defaulters…. NONE of them had filed for bankruptcy….WHY?

In a business losing money does not mean that you had embezzled funds.
80% of the business fail due to cash flow problems and those can be over come by talking to bankers to extend the loan, or with the help of a short term loan from friends and family.
rest of the business usually failed as a result of non conducive market scenario and is part of the learning process.

I agree that in traditional societies like India, being fired from the job or failure in your latest venture makes you the center of the town gossip… but who cares about the world… you have responsibility towards your family, your kids and killing yourself/banker does not solve the problem.
Try talking to your banker to extend the loan tenure, sell off some of the assets and see if you start over again… if you still cannot.. then don’t be shy, ask for help… you will be surprised to know it coming from unlikeliest of the places. Friends and family might help you because they know you are a good man. More often then not acquaintance often pinch in. Often its a pure business deal, where they pump in money in return of sale of assets/partnership… sometimes they do it because they have faith in your business skills and they know that this is a temporary phase.. in future you will not only succeed, but will be gratitudeous.

If nothing works, then don’t start your evasive tactics… Declare bankruptcy, take the assistance of the law and discharge your loans and live life honorably.

India has bankruptcy laws dating as old as 1874… and today’s law clearly demarcates the business/company’s assets from the personal assets… it distinguishes between the assets of the family and your assets and has all the features that allows you to write-off the loan once and for all and start again. Once you start the bankruptcy proceedings, the bank will audit you, you might be asked to visit the court/negotiation table a couple of times… but can no longer harass for the dues…

Lastly a quote from Rich Dad, Poor Dad
“Being Broke is temporary, but being poor is eternal”

 

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38 thoughts on “Indian Bankruptcy laws

  1. Hi,

    Can you tell me what is the procedure for filing for individual or couple bankruptcy in India? How does one go about it?

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    • live your life as you are hide rightnow. never use your golden days identity like pancard, driving licence, emailid, mobile nos, even change your kids school. and start new life this only way.

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  2. please anyone let me know the procedure for filing bankruptcy in india and also the implications of it?????
    my husband has been running a business for 4 years with the money borrowed from his friends at very high interest and in the intial days since the business was running properly was able to expand and easily pay interest and in the process of expansion was able to raise further funds from others. now the business has started dipping in the last 6 months. due to the goodwill raising funds was not an issue then. now as far as my assessment goes we are deeply in trouble with over 10crores lost and will not be able to return that sought of money and hence we have run away from home and hiding for the fear of people killing us. i have a daughter of 2 years to take care. my husband is working in a supermarket for our livelihood. dont know what to do??? can anyone suggest something????????please

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  6. In USA if you file a bankruptcy you are not eligible to get loan from any financial institutions. Is it the same case in India too?

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  7. Filing bankruptcy is pretty easy.

    Higher a lawyer or buy a stamp paper worth 500/ and mention your name address and subject as bankruptcy petition in respective court under section Presidency act 1920. Mention all your liabilities on and assets on one page. Please remember to highlight more liability than assets. Court will appoint an office…bribe him if he shows tantrum/negative vibes. You are all set as free bird in the sky for few months/year.

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