Report of the 1st IBBI Working Group on Individual Insolvency
Operationalising the Insolvency and Bankruptcy Code for resolution of personal insolvencies
A year after the Insolvency and Bankruptcy Code, 2016 (Code) was enacted, the Insolvency and Bankruptcy Board of India constituted a Working Group to recommend the strategy and approach for implementation of the Code’s provisions dealing with personal insolvency in relation to (i) personal guarantors to corporate debtors, and (ii) individuals having businesses, and submit a report along with the draft rules and regulations.
The Working Group released its report in August, 2017 and made the following recommendations, amongst others-
(i) creating infrastructure to enable mediation in personal insolvency cases;
(ii) enabling debt counselling of debtors who are going through insolvency or bankruptcy processes under the Code to avoid repeat defaults; and
(iii) taking steps to promote financial literacy and reduce the stigma associated with individual insolvency.