The main reason for people to file for bankruptcy is to become debt free in nature. There are so many reasons for people to fall in debt on the first place and one such prime reason gets to be medical based requirements. If you or anyone in your family has been associated with medical issues, then you have to focus on their treatments. These issues might cost you some money, if not more. On the other hand, if the disease is way too dangerous then you might have to lose all your savings and fixed deposits on the treatments. Sometimes, you might have taken medical loans for helping to treat people you love but if you fail to pay for the loan on time, you need to be associated with bankruptcy law in India for the next stages of gaining freedom for sure.

Basic process to cover while filing for bankruptcy:

The insolvency code for the individuals as presented under Indian bankruptcy law will make the process turn out to be a lot smoother than usual. A quicker and smooth bankruptcy procedure can always help multiple borrowers to just repair and rebuild the financial life, which people might have lost to the medical debts.

Just imagine falling right into the deadly trap of debt trap. You will eventually exhaust all the funding sources and find yourself at dead end as medical bills are way too expensive to say the least.  The only recourse at this point got to be bankruptcy and nothing else. Even though the Indian laws have some provision where individuals can file for bankruptcy, the procedure is not going to be that streamlined as with some of the corporate entities under IBC. Even though, IBC has its pair of set rules for the individual bankruptcy, they are not likely to get notified.

Heading towards the bankruptcy procedure:

If you reside anywhere in Kolkata, Chennai or Mumbai, your services will be mainly governed by the Presidency Towns Insolvency Act of 1909. For the other parts in India, you will mainly be governed by the Provincial insolvency Act 1920. Both these laws are considered to be more or less similar and are meant to get replaced by insolvency and bankruptcy law or IBC.
Under the current provincial Insolvency Act, you can always file for bankruptcy if you are not being able to repay debt, which is greater than a certain amount.

It is only after analyzing that the conditions are met well before filing for bankruptcy, the court has the right to either accept or just reject the application.

Until the decision on application is well taken, an interim receiver is the one to take possession of property of the debtor. In case the application gets admitted, the court might get the chance to stay apply a stay on the legal proceedings against assets of debtor or the property. It means you will receive stay order against the forward recovery efforts by creditors.
Once this application gets admitted the property then vests with the receiver as appointed by the judge or the court. This official will then distribute assets among creditors, unless you have proposed any compromise as accepted by creditors and court.

When this procedure gets completed, you might be the one discharged from the bankruptcy mark by court. It is the only way to build life and then work on your finances afresh, without getting hounded by the previous creditors now.

When the insolvency proceedings are pending:

Even though the insolvency proceedings are now pending before court, you might further apply for that minimum maintenance based amount for not just your own but even for your family’s financial survival. Unless you are discharged from the mark of bankruptcy, there are so many restrictions as applied to you.

Under the present law, the un-discharged insolvent cannot act as a company’s director or be elected to just sit or vote as member of any of the local authority. Once the person gets discharged, any form of restriction and disqualifications will get removed.

Always remember that the procedure will not discharge you from all the debts. An order of the discharge by the present court will release the said insolvent from all the debts, which will except those specified right under relevant statutes like debt due to the government or any debt that incurred by just means of any fraudulent case.

Always remember that there is no prison for the debtors living in India and any form of imprisonment based on this section will remain unconstitutional. But, there are chances for you to go to prison if you end up committing any fraud base case to the debts that you currently owe. For example, if you end up taking a housing loan showing some fake documents, then you might be easily prosecuted against any of the fraud case.