Introduction

Prospect Legal is a premier law firm specializing in debt recovery and insolvency resolution under the Insolvency and Bankruptcy Code (IBC), 2016, with a proven track record of securing swift recoveries for financial and operational creditors. With our extensive expertise, our team has successfully navigated complex corporate insolvency cases before the National Company Law Tribunal (NCLT), recovering substantial amounts of defaulted debts. We combine strategic litigation, negotiation acumen, and deep knowledge of IBC provisions to protect creditors’ interests, enforce security rights, and expedite the Corporate Insolvency Resolution Process (CIRP).

Where You Can Find Remedies?

Key forums for debt recovery include:

• National Company Law Tribunal (NCLT): Initiates CIRP under Sections 7, 9, and 10 of the IBC.
• Debt Recovery Tribunals (DRTs): Handle traditional debt recovery under the Recovery of Debts and Bankruptcy Act, 1993.
• Appellate Authorities: The NCLAT and Supreme Court for appeals against NCLT orders.

Struggling with unpaid debts? Contact Prospect Legal today to reclaim your dues through legally enforceable strategies.

📞 Call us at 7000-12-7225

Understanding the Legal Process

Voluntary Process (Pre-Litigation Settlement):

1. Demand Notice: Issue a formal notice under Section 8 of the IBC (for operational creditors).
2. Negotiation: Engage in out-of-court settlements or One-Time Settlement (OTS) talks.
3. Debt Restructuring: Amend payment terms through mutual agreement.

Compulsory Process (NCLT-Driven CIRP):

1. Filing Application: Submit a petition under Section 7 (financial creditors) or Section 9 (operational creditors).
2. Admission by NCLT: Tribunal verifies default (₹1 crore minimum) and admits the case.
3. Moratorium & Resolution: Appoint an Insolvency Professional (IP), form a Committee of Creditors (CoC), and approve a resolution plan.
4. Liquidation: If resolution fails, liquidate assets under Section 53 for proportional recovery.

Legal Protection Under Key Provisions

Section 7 of the IBC: Financial Creditor Rights

• When Can a Claim Be Filed?
  • On default of ₹1 crore or more (individual or jointly).
  • If debt is backed by valid documentation (loan agreements, security interests).
  • When the corporate debtor fails to repay within 10 days of demand.

Section 60 of the IBC: NCLT’s Adjudicatory Powers

• Powers of the Adjudicating Authority:
  • Stay ongoing lawsuits against the debtor during moratorium.
  • Approve or reject resolution plans based on feasibility.
  • Prioritize creditor payouts during liquidation.

Process of Remedy Through Prospect Legal

Step 1: Initial Consultation & Risk Assessment

• Debt Analysis: Scrutinize loan agreements, invoices, and default evidence.
• Viability Check: Assess the debtor’s asset base and recovery prospects.
• Strategy Selection: Advise on CIRP vs. OTS based on urgency and costs.
• Client Briefing: Explain timelines, costs, and success probabilities.

Step 2: Legal Documentation & Filing

• Draft Section 7/9 applications with proof of default and debt records.
• File interim applications to secure assets or halt debtor transactions.
• Represent clients in NCLT hearings for admission of cases.
• Serve notices to debtors, guarantors, and regulatory bodies.

Step 3: Compliance & Negotiations

• Negotiate with the CoC for favorable resolution plan terms.
• Challenge undervalued asset sales or fraudulent transactions under Section 66.
• Coordinate with Insolvency Professionals for asset valuation.
• Address objections from other creditors or stakeholders.

Step 4: Resolution & Final Actions

• Secure NCLT approval for resolution plans or liquidation orders.
• Monitor asset distribution under Section 53 waterfall mechanism.
• Initiate enforcement proceedings for non-compliance with orders.

Provide post-recovery audits to strengthen future credit policies.
📞 Call us at 7000-12-7225