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Insolvency and Bankruptcy - Law and Practice · Fresh Start Process

Application for Fresh Start and Its Admission under IBC

Updated 11 October 2026 · Fact-checked

A fresh start application is filed by an eligible debtor, personally or through a resolution professional, with the Adjudicating Authority (the Debt Recovery Tribunal for individuals, section 79(1)). A resolution professional is appointed and reports on the application. The Adjudicating Authority then admits or rejects it within fourteen days of that report.

Understand Application for Fresh Start and Its Admission

The fresh start process is a relief for very poor individual debtors. It lets them discharge qualifying debts and begin again without going through full insolvency or bankruptcy. It sits in Part III of the Code, Chapter II.

The process starts with an application. Under section 80, a debtor who cannot pay his debts and meets the eligibility conditions may apply, either personally or through a resolution professional. The application is made under section 80 and is dealt with under section 81. The application goes to the Adjudicating Authority. For individuals, this is the Debt Recovery Tribunal (section 79(1)).

After the application is filed, a resolution professional (RP) is put in place. If the debtor applied through an RP, the Adjudicating Authority asks the Board (IBBI) to confirm that no disciplinary proceedings are pending against that RP. The Board either confirms him or rejects him and nominates another. If the debtor applied himself, the Board nominates an RP. The Adjudicating Authority appoints that RP by order (section 82).

The RP examines the application and submits a report recommending acceptance or rejection. The Adjudicating Authority then has fourteen days from the report to pass an order admitting or rejecting the application (section 84). This order relates to the application under section 81(1). An admission order must state the amount accepted as qualifying debts and other amounts eligible for discharge under section 92.

On admission, a moratorium begins on all debts (section 85). Keep this topic separate from the eligibility conditions of section 80 and from the discharge order. Here the focus is the filing and the admission or rejection.

Key rules to remember

Who may apply (s.80(1)-(2))
Unable to pay debt + all conditions of s.80(2) met → may apply, personally or through an RP
Conditions include income not above ₹60,000, assets not above ₹20,000, qualifying debts not above ₹35,000, no dwelling unit owned, no subsisting fresh start, insolvency or bankruptcy process, no fresh start order in the preceding 12 months.
Appointment of RP when debtor applies through an RP (s.82(1)-(2))
AA directs Board within 7 days of receipt → Board confirms the RP or rejects him and nominates another
Confirmation is sought that no disciplinary proceedings are pending against that RP.
Appointment of RP when debtor applies himself (s.82(3)-(5))
AA directs Board within 7 days → Board nominates RP within 10 days → AA appoints by order
The appointed RP is given a copy of the fresh start application (s.82(6)).
Admission or rejection (s.84(1))
AA passes order within 14 days from the date of submission of the RP's report
The order may admit or reject the application.
Contents of admission order (s.84(2))
Order states the amount accepted as qualifying debts + other amounts eligible for discharge under s.92
These figures feed into the fresh start order.
Copy to creditors (s.84(3))
Copy of order + copy of application to creditors named in the application within 7 days of the order
Seven days run from the date of the order.
Moratorium on admission (s.85)
Starts on date of admission, covers all debts, ends after 180 days beginning with date of admission unless the order is revoked under s.91(2)
Pending proceedings on debts are deemed stayed and creditors cannot start fresh action, subject to s.86.
Replacement of RP (s.89)
Application by debtor or creditor → AA refers to Board within 7 days → Board recommends within 10 days → AA appoints
The Board recommends a professional with no disciplinary proceedings pending.

How to solve Application for Fresh Start and Its Admission questions

Use this order for any question on filing and admission. Link each step to the fact pattern.

  1. 1Identify the debtor and the forum: an individual debtor applies to the Adjudicating Authority, which for individuals is the Debt Recovery Tribunal (section 79(1)).
  2. 2Check that this is a fresh start question and not insolvency resolution under section 94. Fresh start provisions are in Chapter II, from section 80 onwards. Sections 80 to 85 cover eligibility, appointment of the RP, admission and the effect of admission. Fresh start applies only if the section 80(2) conditions are met.
  3. 3Test each section 80(2) condition against the facts: income, assets, qualifying debts, dwelling unit, subsisting processes, and any fresh start order in the last twelve months.
  4. 4State how the RP is appointed: through the debtor's own RP (Board confirms or nominates) or on the debtor's own application (Board nominates within ten days). The Adjudicating Authority appoints by order.
  5. 5Note that the RP examines the application and reports with a recommendation. Count fourteen days from the report for the admission or rejection order.
  6. 6State what the admission order must contain: qualifying debts accepted and other amounts eligible for discharge under section 92. Then add the seven-day copy to creditors.
  7. 7Mention the effect of admission: moratorium on all debts, stay of pending proceedings, and debtor restrictions under section 85.
  8. 8Conclude clearly: application admitted or rejected, and the next step.

Quickest way: Timeline-and-gate method

When to use it: Use when the question gives dates, a debtor profile and asks whether the application is valid or what happens next.

  1. Run the eligibility gate first: any single failed section 80(2) condition means the debtor cannot use fresh start.
  2. Draw a four-point timeline: application, RP appointed, RP report, AA order.
  3. Attach the time limits: 7 and 10 days for RP appointment, 14 days from report for the order, 7 days from order for copies to creditors.
  4. Add the moratorium: it begins on the admission date and runs 180 days.
  5. Write the conclusion in one line, then give the reasons.

Common mistakes in Application for Fresh Start and Its Admission

  • Treating section 94 as the fresh start provision.

    Sections 94 and 80 both deal with debtor applications, so they get mixed up.

    Fix: Section 94 is for insolvency resolution by a debtor. Fresh start provisions are in Chapter II, from section 80 onwards. Sections 80 to 85 cover eligibility, application, appointment of the RP, admission and the effect of admission.

  • Counting the fourteen days from the date of the application.

    Students assume all periods start at filing.

    Fix: Under section 84(1), the fourteen days run from the date the RP submits his report.

  • Saying the debtor appoints the RP.

    The application may be filed through an RP, so students assume the debtor chooses.

    Fix: The Adjudicating Authority appoints, on the Board's confirmation or nomination (section 82).

  • Forgetting what the admission order must state.

    Students focus only on the admit or reject decision.

    Fix: Add that the order states the qualifying debts accepted and other amounts eligible for discharge under section 92.

  • Giving the wrong moratorium period or scope.

    Students mix it up with the corporate CIRP moratorium.

    Fix: For fresh start, it commences on admission, covers all debts, and ends at the end of 180 days from admission unless the admission order is revoked under section 91(2).

  • Ignoring the twelve-month bar in section 80(2)(g).

    The long list of conditions makes it easy to skip the last one.

    Fix: Always check whether a fresh start order was made for the debtor in the twelve months before the application.

Worked examples

Example 1

Mohan, a daily-wage worker in Lucknow, has gross annual income of ₹55,000, assets worth ₹18,000 and qualifying debts of ₹30,000. He owns the small house he lives in. No other process is pending against him. Can he apply for a fresh start?

Show the solution
  1. Income of ₹55,000 does not exceed ₹60,000, so the income condition is met.
  2. Assets of ₹18,000 do not exceed ₹20,000, so the asset condition is met.
  3. Qualifying debts of ₹30,000 do not exceed ₹35,000, so the debt condition is met.
  4. Section 80(2)(e) requires that the debtor does not own a dwelling unit, whether encumbered or not. Mohan owns his house, so this condition fails.
  5. All conditions must be met together, so one failure is enough to bar him.

Answer: Mohan cannot apply for a fresh start because he owns a dwelling unit, even though he meets the income, asset and debt limits.

Example 2

A fresh start application is filed by an eligible debtor, Sunita, personally. The RP submits his report to the Adjudicating Authority on 10 March. The Adjudicating Authority admits the application on 20 March. By what date must the order have been passed, by what date must creditors get a copy, and when does the moratorium end, counting 20 March as day 1?

Show the solution
  1. Under section 84(1), the order must be passed within fourteen days from the date of the RP's report: 10 March + 14 days = 24 March.
  2. The order was passed on 20 March, which is within the limit, so it is valid on timing.
  3. Under section 84(3), a copy of the order and the application must reach the creditors within seven days of the order: 20 March + 7 days = 27 March.
  4. Under section 85(1), the moratorium starts on the date of admission, 20 March, and covers all debts.
  5. Under section 85(4), it ends at the end of 180 days beginning with the date of admission. Counting 20 March as day 1: 12 days in March, 30 in April (42), 31 in May (73), 30 in June (103), 31 in July (134), 31 in August (165), then 15 days in September (180).
  6. So the moratorium ends at the end of 15 September, unless the admission order is revoked earlier under section 91(2).

Answer: The order was due by 24 March, so 20 March is in time. Creditors must receive copies by 27 March. The moratorium runs from 20 March to the end of 15 September, unless the admission order is revoked.

Exam tips

  • Answer in the paper's pattern: provision, facts, conclusion. Name the section, apply it to the figures, then state admit or reject.
  • Learn the time limits as a set: 7 days, 10 days, 14 days from report, 7 days from order, 180 days moratorium.
  • If the question gives financial figures, test every section 80(2) limit one by one and show the working.
  • Do not mix up the Board's role (confirm or nominate) with the Adjudicating Authority's role (direct and appoint).
  • Use the words qualifying debts, moratorium and Adjudicating Authority exactly as the Code does.

Practice questions from Fresh Start Process

Application for Fresh Start and Its Admission: frequently asked questions

Who decides whether a fresh start application is admitted?

The Adjudicating Authority decides. For individuals, this is the Debt Recovery Tribunal (section 79(1)). It passes an order admitting or rejecting the application within fourteen days from the date the RP submits his report.

Can a debtor file the fresh start application without a resolution professional?

Yes. Section 80(2) allows the debtor to apply personally or through a resolution professional. If he applies personally, the Adjudicating Authority asks the Board to nominate an RP, and appoints the nominee by order.

What happens to the debtor's creditors after admission?

A moratorium begins on all debts. Pending legal proceedings on debts are deemed stayed, and creditors cannot start new proceedings, subject to section 86. Creditors named in the application receive a copy of the order and the application within seven days of the order.

Can the resolution professional be changed?

Yes. The debtor or a creditor can apply to the Adjudicating Authority under section 89. It refers the matter to the Board within seven days, and the Board recommends a new professional within ten days. The Adjudicating Authority then appoints that person.