If you are unable to pay your obligations and require protection from creditors, you can file an insolvency petition. The Provisional Insolvency Act of 1920 governs insolvency filing. An individual can file an insolvency petition if any of the following three requirements are met: he or she is unable to pay his or her debts. The debts total more than Rs 500. In order to carry out a money order, the person is detained or imprisoned. In implementation of such a decree, there is a pending order of attachment against his or her property.
Under the following circumstances, a creditor may file an insolvency petition. The total debt owed to the creditor is in excess of Rs 500. The debt is either due now or will be due in the near future. Within three months of the insolvency act’s commission, an insolvency petition was filed. A petition for insolvency is filed in the district court that has jurisdiction over the debtor’s residence or place of business.
If the debtor has been arrested or imprisoned, the insolvency petition might be submitted while he or she is still in jail. The court can appoint an interim receiver after the insolvency petition is presented or before an order is issued after an insolvency petition is filed.
Reference: The Provisional Insolvency Act, 1920 – – AHG231 – 202100581 – 125 – 95 – 202100192-20210041-18872