While setting up and running our businesses, we need to borrow money from banks, NBFCs and such other financing organisations. The lenders typically ask for guarantees from the promoters, directors and such individuals; while sanctioning the loans. This has become a standard practice.
We know that under the other laws (contracts - S 126 etc) the liability of the guarantor is co-terminus with the liability of the Principle Borrower. That means until the Principle Borrower has not repaid the loan, the liability of the guarantors (jointly and severally) will exist.
We also are aware that if the guarantor has paid some money to the lenders under the contract of guarantee, the guarantor is entitled to recover the sum from the Principle Borrower.
In pre-IBC era, if a company defaulted, the lender would proceed against them to recover the money under RDDB (Recovery of Debts due to Banks and Financial Institutions Act 1993) or SARFAESI (Securitisation and Reconstruction of Financial Assets and Security Interests Act 2002). The lenders also could invoke guarantees.
Insolvency and Bankruptcy Code 2016 provides for insolvency and bankruptcy of limited liabilities entities (like companies and LLPs), and others (individuals and partnerships under the 1932 Act) separately. While those parts applicable to Companies and LLPs were notified earlier, the individual insolvency parts were not notified at that time. With effect from 01/12/2019, provisions of the Act have been made applicable to a Personal Guarantor under IBC.
Like corporate insolvency, there are two stages in respect of a Personal Guarantor under IBC. In the first stage, called Insolvency Resolution Process (IRP), attempt is made to come up with a repayment plan that is acceptable to the creditors. When it turns out that it is not a workable option, the second step is Bankruptcy of the debtor, wherein the assets of the debtor are sold and the money recovered is distributed to the creditors.
In the earlier remedies, each loan was separately treated and recovery initiated. Under Insolvency and Bankruptcy Code, the Insolvency Professional has to go through public announcement and seeking claims from all creditors. All the liabilities and assets of the debtor are aggregated. It will only exclude only the excluded debts and excluded assets, specified under the Act. The discharge order, however does not discharge the debtor from debts not included qualifying debts or liabilities not included in 92 (3).
Corporate Debtor (CD) S 3(8) is a Corporate Person who owes debt to any person. Corporate Person S 3(7) is a Company (under Companies Act 2013) or LLP (under LLP Act 2008) or any other person incorporated with limited liability under any law for the time being, but does not include a financial service provider.
A Personal Guarantor under IBC S 5A(22) means an individual who is the surety in a contract of guarantee to a corporate debtor.
If you, as an individual, have given written guarantee to a company or LLP and the said company or LLP defaults in their repayments, the lender may proceed against you. If the guarantee is given in respect of Principle Borrower who is an individual or Partnership Firm under 1932 Act, the IBC provisions, as of now, will not apply.
All assets except excluded assets will be included in the statement of affairs of the guarantor. Excluded assets (S79(14) are -
(a) unencumbered tools, books, vehicles and other equipment as are necessary to the debtor or bankrupt for his personal use or for the purpose of his employment, business or vocation,
(b) unencumbered furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his immediate family;
(c) any unencumbered personal ornaments of such value, as may be prescribed (presently this value is Rs. 1 lac), of the debtor or his immediate family which cannot be parted with, in accordance with religious usage;
(d) any unencumbered life insurance policy or pension plan taken in the name of debtor or his immediate family; and
(e) an unencumbered single dwelling unit owned by the debtor of such value as may be prescribed (presently this value prescribed is Rs. 20,00,000 in urban area and Rs. 10,00,000 in rural area);
If the value of the dwelling unit is higher than the stated amounts, the guarantor shall pay the creditors any excess over the specified amount; or the asset be sold and the guarantor be paid the specified amount by the resolution professional.
In case of joint ownership, the RP should obtain no objection letters from other joint owners seeking partition before including in the repayment plan.
All debts except the excluded debts are to be included. Excluded debt means (S79 (15))
(a) liability to pay fine imposed by a court or tribunal;
(b)liability to pay damages for negligence, nuisance or breach of a statutory, contractual or other legal obligation;
(c) liability to pay maintenance to any person under any law for the time being in force;
(d) liability in relation to a student loan;
Either the Debtor can file application under Section 94 or any Creditor can file application under Section 95. In either case, the application may be filed directly by the debtor or creditor or through Resolution Professional.
If creditor is filing an application, the creditor needs to send a notice of demand to the PG to pay the debt within 14 days of the service.
The application is to be filed to the Adjudicating Authority (AA). Now the Adjudicating Authority for corporate entities is NCLT (National Company Law Tribunal) and that for individuals is DRT (Debt Recovery Tribunal). If proceedings under IBC are underway in respect of the Corporate Debtor (insolvency or liquidation), application can be filed with NCLT. (Insta Capital Pvt Ltd Vs Ketan Vinod Kumar Shah). Even if application has been filed and pending to commence Corporate Insolvency Resolution Process against a Corporate Debtor, an application in respect of insolvency of PG to the Corporate Debtor can be filed with NCLT. (PNB Housing Bank Vs Mohit Arora). It is not necessary that the application has to be admitted by NCLT in respect of the Corporate Debtor.
What is very important to understand is when an application is submitted to NCLT, from that date onwards, interim moratorium S 96, comes into force. This will remain so in force till NCLT admits (or rejects) the application. During this Interim moratorium any pending legal action or proceeding in respect of any debt shall be deemed to have been stayed. The creditors shall not initiate any proceedings in respect of any debt.
In case of a partnership firm, the moratorium will operate against all partners of the firm.
NCLT, based on the application, appointments the RP within 7 days of the application, (when application is through such RP or when one is suggested), subject to any disciplinary proceedings against such RP. If no RP is suggested, or the if the suggested RP has disciplinary proceedings against him, NCLT shall nominate a suitable RP.
The RP, within 10 days of his appointment must submit a report to Adjudicating Authority recommending whether Adjudicating Authority should accept or reject the application. The Adjudicating Authority would then pass an order admitting or rejecting the application within 14 days of the report from RP.
When NCLT admits an application against a PG, moratorium (S 101) comes into force and shall remain in force for 180 days or the date on which Adjudicating Authority passes an order approving the repayment plan.
During this moratorium, any pending legal action or proceeding in respect of any debt shall be deemed to have been stayed. The creditors cannot initiate any legal action or legal proceedings in respect of any debt. These two points are common with the Interim Moratorium. In addition, this Moratorium puts restriction on the debtor that the debtor shall not transfer, alienate, encumber or dispose of any of the assets or his legal right or beneficial interest therein.
Unlike Corporate Insolvency, where the possession of the assets of the Corporate Debtor is with the IRP / RP; in case of Insolvency of the PG, possession remains with the debtor, but with prohibition on transfer of assets.
Within 7 days of Adjudicating Authority’s order of admission, the RP must issue public notice (S 102 - ads in papers – one English and one in local language where the guarantor resides. In addition it is to be published in Adjudicating Authority website and affixed in Adjudicating Authority premises). This notice will invite claims from creditors within 21 days of public notice.
The RP collects claims received and prepares a list of creditors after verification. This list needs to be circulated to the guarantor, to the creditors and the Adjudicating Authority. This list is also to be presented to the creditors at the meeting of creditors. If the guarantor has a website, the list should be put up on the website also. The time limit for list of creditors is 30 days from public notice.
The RP also has to prepare a statement of affairs of the Personal Guarantor under IBC.
The repayment plan is a key to the whole process. This is a plan document that debtor has to prepare in consultation with the RP. The repayment plan contains proposal made to the creditors to restructure the debt.
The repayment plan must include – justification for the plan, why creditors should agree to the plan; and provision for fees of the resolution professional.
The plan may authorise or require the resolution professional to carry on the business of the debtor on his behalf or on his name, to realise the assets or the debtor and to dispose of or administer any funds at the disposal of the debtor.
The RP has to submit a report (S 106) on the repayment plan to Adjudicating Authority within 21 days from last date or receipt of claims. The RP needs to report on whether the plan is complaint with present laws, whether it has reasonable prospect to get approval from creditors and whether a meeting of creditors needs to be convened.
This meeting (S 107) may be convened between 14 and 28 days from submission of the report. A notice shall be required to be sent to the creditors at least 14 days before the date. The notice should be accompanied by copies of repayment plan, statement of affairs, report of resolution professional on the plan, and proxy form. This meeting is not mandatory, but the resolution professional should specify reasons for not convening it.
Creditors decide on approving, rejecting or modifying the repayment plan through the voting process. Voting share is based on proportion of their debt to the total debt. Associates of debtor, even though they may be creditors cannot vote. Any modifications suggested by the creditors need to be accepted by debtor before the can be finally accepted.
Associates of debtor are defined in S 79 (2). Associates include immediate family, relatives of the debtor and those of spouse of the debtor, persons in partnership of debtor and their spouses and relatives, employer or employee of the debtor, trustee of a trust the beneficiaries of which include the debtor. Associates include a company where the debtor along with his associates hold 51% or more share capital, or control the appointment of BOD of the company.
Creditors can be secured or unsecured. Secured creditors must decide whether they will forfeit their right to enforce their security or would like to enforce it. If they want to enforce their security, they cannot vote in the creditors meeting. However, one creditor can be partly secured and partly unsecured, and can vote in respect of unsecured part, with prior clarification of the fact. If secured creditor votes in the creditors meeting, it implies that he is forfeiting his right to security.
Creditors cannot, in insolvency or bankruptcy, vote for unliquidated amount of debt.
Plan approval must be with at least 75% vote in value of credit, present and voting. Present includes present in person or through proxy.
RP should then circulate the minutes of the meeting electronically in 48 hours of the meeting. RP also should seek vote of those creditors who did not vote or who were not present, within 24 hours of closing of the vote.
RP should, (S 112) prepare a report on the vote and circulate it (S 113) to debtor, creditors and Adjudicating Authority. RP finally sends copies of the filed documents to debtor and creditors.
Adjudicating Authority may finally approve or reject the repayment plan submitted, and may pass suitable order (S 114). Once this order is passed, moratorium ends. If no such order is passed, the moratorium ends after 180 days from the date of admission.
The repayment plan then has to be supervised by the RP till completion. Within 14 days of completion of the repayment plan, RP shall forward relevant documents to Adjudicating Authority and others who are bound by the plan, i.e. debtor and creditors. RP, at this stage, shall file an application with Adjudicating Authority for a discharge order (S 119).
Once Adjudicating Authority passes the discharge order, the IRP process is complete.
Anytime during the resolution process or during progress of the repayment plan, if the RP finds that the debtor is not co-operating, he should file an application with the Adjudicating Authority to that effect for appropriate directions.
If Adjudicating Authority rejects the plan under S 114, the debtor and the creditors become entitled to file an application for bankruptcy of the guarantor. The bankruptcy order is not automatic on failure of resolution; separate application has to be made.
If resolution cannot be reached, the next possible action is bankruptcy. This has to be specifically initiated, unlike corporate insolvency, in which case liquidation can be automatic.
Bankruptcy can be initiated by debtor or creditor under the following circulstances-
S 121 application can be made by a creditor within 3 months of the relevant order if Adjudicating Authority has passed any of the following orders-
S 122 application can be filed by the debtor. For this the debtor will need to submit copies of the insolvency proceedings, statement of his affairs and order of Adjudicating Authority. The debtor may propose RP.
S 123 application may be filed by creditor/s. The creditor needs to submit proceedings of insolvency and Adjudicating Authority order as above. In addition, creditors have to submit details of the debt. A secured creditor making an application either gives up his right to security or can make an application only on respect of any unsecured debt owed to him.
When an application is made, interim moratorium, as in insolvency resolution comes into force. Any disposition of property made by the bankrupt from the date of application to the date of commencement of bankruptcy shall be void under S 158.
An insolvency professional will be appointed by the Adjudicating Authority as the Bankruptcy Trustee. If one is proposed, the same may be appointed subject to any disciplinary proceedings against him. If none is proposed, or if one is proposed but has disciplinary proceedings against him, the Adjudicating Authority will appoint one in consultation with IBBI.
Within 14 days (timeline as a guide in such cases) of confirmation of nomination, the Adjudicating Authority issues Bankruptcy order (BO) (S 126). This order has a validity (S 127) till the debtor is discharged under S 138. Date of this order is the date of commencement of bankruptcy.
Within 7 days of this Bankruptcy Order, the bankrupt shall submit a statement of affairs to the Bankruptcy Trustee.
When a Bankruptcy Order is passed, the estate of the bankrupt vests with the Bankruptcy Trustee S 154. The vesting does not need any conveyance, assignment or transfer. The debtor, his banker or any other agent who may be holding estate on behalf of the bankrupt is to deliver the property and documentation to the Bankruptcy Trustee(S 156). The Bankruptcy Trustee shall take possession (S 157) and control of all property, books, papers and records. Any actionable claims are deemed to have been transferred. Also the moratorium applies.
Estate of the bankrupt also includes any after acquired property (S 159). i.e. any property the bankrupt acquires after the Bankruptcy Order or becomes entitled to. Bankruptcy Trustee needs to issue a notice to the Bankrupt within 15 days of him coming to know of such property.
With the commencement of bankruptcy, certain disqualifications and restrictions apply on the debtor. Disqualifications S 140 state that such debtor cannot be appointed as a trustee or cannot represent a trust of estate; cannot be appointed or cannot continue acting as a public servant. He cannot be elected to public office or be elected or sitting or voting as a member of any local authority.
Restrictions (S 141) include that he cannot continue as a director, cannot directly or indirectly promote, form or manage a company. He cannot create a charge on his estate without prior consent of the Bankruptcy Trustee. He must inform his partners about commencement of bankruptcy. He must communicate to his business associates before entering into transactions (where value of business is higher than the specified value (that he is undergoing bankruptcy). He cannot travel abroad without the approval from Adjudicating Authority. He cannot maintain legal action in respect of his bankruptcy debt, without prior approval of Adjudicating Authority.
These restrictions apply till they are removed with modification or recall of Bankruptcy Order under S 142; or with Discharge Order under S 138. The Bankruptcy Order can be modified or recalled by Adjudicating Authority under S 142. This may be done for any errors apparent on the face of the order; or when the bankruptcy debts and the expenses for bankruptcy process are paid off or are adequately secured.
Although in all other processes – Corporate Insolvency Resolution Process, Liquidation, PG Insolvency cases, the public notice is issued by the RP, in this case it is issued by Adjudicating Authority (S 130). This will be issued inviting claims from creditors. Adjudicating Authority also shall issue notices to creditors (within 10 days) mentioned in statement of affairs or the application submitted.
Creditors have to submit claims within 7 days of the public notice. The Bankruptcy Trustee must make a list of creditors within 14 days of commencement date including claims submitted, information disclosed by bankrupt and statement of affairs filed.
Within 14 days of preparing a list of creditors, the Bankruptcy Trustee shall give notice to creditors to provide proof of debt. This will include value of the debt and date on which the debt was contracted along with full particulars. Bankruptcy Trustee shall also ask full particulars of the security, if any. If any debt does not have specific value, Bankruptcy Trustee shall estimate the value. If Bankruptcy Trustee asks for proof of security and it is not furnished within 30 days of such request, such property shall be treated as free of security (S 171 (8)).
Secured creditors can enforce their security or surrender their security. In the former case, they still can file a claim for balance money, and in the latter case for the entire money (S 172).
Within 21 days of commencement, Bankruptcy Trustee shall conduct a meeting of creditors (S 133). The quorum for the meeting shall be decided by the Bankruptcy Trustee (S 134). The business will include constitution of committee of creditors and any other business Bankruptcy Trustee deems fit. Proxy will be allowed.
Minutes of this meeting shall be recorded, signed and retained as a record of proceedings of the Bankruptcy process.
Voting rights of the creditors, shall be as determined by the Bankruptcy Trustee (proportional to the share of debt). Like in insolvency situation, creditors cannot vote in respect of unliquidated amounts. Also associates of the debtor cannot vote. (S 135)
Bankruptcy Trustee shall be responsible (S 136) for administration and distribution of the estate.
When administration is complete, i.e. debt has been repaid or the debtor has no more assets for distribution, the Bankruptcy Trustee shall convene a meeting of the creditors with a report of the administration of the estate (S 137). The committee approves the report of the Bankruptcy Trustee and makes decision whether Bankruptcy Trustee can be released under S 148. Expenses of this meeting are also to be paid with the proceeds of the estate of the bankrupt.
Within 7 days of this approval (S 138) from committee of creditors or on the expiry of one year from the commencement date; Bankruptcy Trustee shall make an application to the Adjudicating Authority for discharge of the debtor. Adjudicating Authority may pass an order of discharge (DO) as it deems fit.
As per S 139, with Discharge Order, the debtor is discharged from debts covered under this bankruptcy. However, there is no relief from excluded debts. Also there is no relief from any debt incurred by breach of trust or fraud.
Even after Discharge Order, the Bankruptcy Trustee is not relieved till formalities under S 148 are complete.
The Adjudicating Authority may modify or recall the Bankruptcy Order under S 142. In such cases, transactions carried out prior to such recall or modifications shall be valid. The property of the bankrupt shall vest with a person appointed by Adjudicating Authority and in absence of such appointment, with the debtor, with any conditions imposed by Adjudicating Authority.
Bankruptcy Trustee is not relieved with the Discharge Order.
Committee of creditors may determine if the Bankruptcy Trustee should be replaced (S 145), and make an application to the Adjudicating Authority. The Bankruptcy Trustee may resign (S 146) if there is a conflict of interest or if he intends to cease to be an IP. Likewise a replacement Bankruptcy Trustee shall be appointed by Adjudicating Authority if a vacancy gets created (S 147).
The fees of Bankruptcy Trustee shall be a (prescribed) percentage of the value of the estate (S 144).
Release of Bankruptcy Trustee (S 148) shall be when he has completed administration of the estate or has been replaced by another Bankruptcy Trustee.
Administration and distribution is governed by Chapter V, sections 149 – 178.
The Bankruptcy Trustee is responsible for investigating into the affairs of the bankrupt, realise the assets and distribute the estate (S 149).
The bankrupt has certain duties towards Bankruptcy Trustee. The Bankrupt must provide information to the Bankruptcy Trustee as required. The Bankrupt also must update the Bankruptcy Trustee on any new property acquired or devolved upon the bankrupt, and communicate any increase in income (S 150).
The Bankruptcy Trustee is empowered under S 151 to enter into contracts, hold property of any description, enter into engagements with respect to the property of the bankrupt, sue and be sued. Bankruptcy Trustee can execute POA, hire employees and do any other act as may be necessary.
Likewise Bankruptcy Trustee has certain powers under S 152 to sell part of the estate, issue receipts. Bankruptcy Trustee can prove, rank, claim and draw a dividend in respect of debts due to the bankrupt.
If any property is held by another person by way of pledge, hypothecation, Bankruptcy Trustee can exercise the right of redemption by giving notice to the concerned persons.
In respect of any securities held in any company or any transferable securities, exercise the rights to transfer as the Bankrupt would have exercised.
Bankruptcy Trustee will require approval of creditors for certain acts (S 154)
Estate of the Bankrupt S 155
Estate of the bankrupt comprises of all the estate, including tangible and intangible assets, including capacity to exercise and initiate proceedings; except the excluded assets and any estate held on trust on behalf of any other person. The estate shall also exclude any sums due to workman or employee from PF, gratuity or pension funds.
Onerous Property of Bankrupt
As in Corporate Insolvency Resolution Process or Liquidation cases, there may be onerous property in respect of a bankrupt.
Onerous property is an unprofitable contract or a property that is not readily saleable or unsaleable, or such that it may give rise to a claim.
The Bankruptcy Trustee must give a notice under S 160 about disclaiming such onerous property to the bankrupt and any other person who may be interested in such property. This notice shall determine the rights, interests and liability of the Bankrupt in respect of such property, and discharge the Bankruptcy Trustee from all personal liabilities in respect of such property from date of his appointment. Such notice will require prior permission of committee of creditors if it has been claimed as a part of the estate of the Bankrupt under S 155.
If any person sustains a loss due to such disclaimer, he shall be deemed to be a creditor to the bankrupt to the extent of his loss.
This notice is not necessary (S 161) if any person interested in that property has applied to Bankruptcy Trustee in writing requiring him to determine if the property is onerous, and the decision is not taken by the Bankruptcy Trustee within 7 days of receipt of such request. If such property cannot be disclaimed, it shall remain a part of the estate of the bankrupt.
Leasehold property can be disclaimed only with a notice of disclaimer (S 162) served on every interested person, and where no application objecting to the disclaimer by the interested person has been filed (with Adjudicating Authority) with respect to such leasehold interest in 14 days of serving of the notice. If an application is made to Adjudicating Authority, the Adjudicating Authority may pass suitable orders.
Challenge against disclaimed property (S 163) can be raised by any person who claims an interest in the disclaimed property; or any person who is under any liability in respect of the disclaimed property. If the disclaimed property is a dwelling house, any person who on the date of application for bankruptcy was in occupation of or entitled to occupy that dwelling house.
Specific transactions of interest
Like in Liquidation, the Bankruptcy Trustee will need to consider undervalued (S 164), preferential (S 165) or extortionate credit (S166) transactions if any. Bankruptcy Trustee will need to make applications to Adjudicating Authority in respect of such transactions.
Undervalued transaction may be a gift, or no consideration has been received, or in consideration for marriage, or a consideration has been received but of a value significantly less than the value of what has been provided by the bankrupt.
Undervalued transactions should have been entered in the period of 2 years ending on filing of application for bankruptcy. A transaction between bankrupt and his associate during the period of two years shall be deemed to be undervalued transaction. It is important that such transaction should have triggered bankruptcy process.
Bankrupt can prove that the transaction was entered in the normal course of business (transaction other than associate) and in such case Adjudicating Authority shall not declare it as undervalued transaction.
Preferential transactions would be with creditor, surety or Personal Guarantor under IBC and such transaction would put that person in a position, in the event of bankruptcy, better than what whould have been in absence of this transaction.
Preference transaction should have been entered with an associate in the past 2 years and with others in the past 6 months. Such transaction should have triggered bankruptcy.
Bankruptcy Trustee may apply to Adjudicating Authority in respect of preferential transactions and the Adjudicating Authority may pass suitable orders, if the Adjudicating Authority is satisfied that the bankrupt was influenced in his decision of giving preference by a desire to put the person he was transacting with, in the event of bankruptcy, in a better position; than if the transaction was not carried out. Such influence will be presumed in the even the transaction is with an associate.
Extortionate credit transactions are transactions involving provision of credit to the bankrupt on terms that require the bankrupt to pay exorbitant payments; that are unconscionable under principles of the law of contract. A debt extended by a person regulated for the provision of financial services in compliance with any applicable law shall not be treated as exorbitant credit transaction. Such transactions should have been entered in the past 2 years.
Bankruptcy Trustee shall make an application in respect of such transactions and seek orders from Adjudicating Authority.
In case of contract entered prior to the date of commencement of bankruptcy, a party other than the bankrupt can apply to Adjudicating Authority for discharge of any obligation of the applicant or the bankrupt; or seek damages by the party or the bankrupt for non-performance of the contract (which will become part of the bankruptcy debt), and the Adjudicating Authority shall pass suitable orders.
S 169 states that bankruptcy proceedings shall continue even after death of the bankrupt. Administration of the estate shall continue as before. Bankruptcy Trustee shall have regard to the claims by legal representative of the deceased bankrupt for funeral and testamentary expenses. Claims in respect of these two shall rank equally to the claims of secured creditors.
Any surplus remaining after paying the creditors and costs of administration should be paid to the legal representatives of the estate.
As and when the Bankruptcy Trustee has enough money, the Bankruptcy Trustee may distribute it after giving notice. Bankruptcy Trustee should, however make provisions for any disputed debts, any potential claims that may not have been received, and for cost of administering the estate.
Any property which is not readily or advantageously saleable, shall be divided among the creditors based on estimated value, with prior approval of the committee of creditors for each transaction.
When the Bankruptcy Trustee has distributed all the property or most of what could be disposed off, he shall give a notice of final dividend and that no further dividend shall be declared. Any person interested may make an application to Adjudicating Authority to defer the date of such dividend. The Bankruptcy Trustee shall pay out bankruptcy expenses pending, if any and then distribute the money to the creditors. Any surplus after paying the creditors shall belong to the bankrupt.
When a creditor had not proved his debt earlier, and interim dividend was distributed; and later such creditor proves his debt, shall be entitled to dividends paid later, including the dividends he had failed to receive (S 177).
Like liquidation, priorities in respect of distribution of money in case of bankruptcy is also specified, as a waterfall mechanism.
Action can be initiated against a Personal Guarantor under IBC. The action can start as an insolvency resolution process. This involves arriving at a repayment plan to the satisfaction of the creditors.
If such plan cannot be arrived at, or cannot be executed completely, the further course of action is bankruptcy of the debtor. This involves disposing off the estate of the debtor and paying the creditors, and any surplus money, to the debtor.
The process can be tedious, but after discharge the debtors and creditors can close the chapter and start anew. For Insolvency Professional, it is a lot of responsibility and compliances.