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CS Professional · Insolvency and Bankruptcy - Law and Practice · Fresh Start Process

Anita applies for a fresh start with gross annual income of Rs 50,000, assets of Rs 15,000 and qualifying debts of Rs 32,000. She is not a bankrupt and owns no dwelling unit. However, a bankruptcy process is already subsisting against her. Which statement is correct?

Anita is ineligible. Although her income, assets and debts are within the limits, the eligibility conditions require that no fresh start, insolvency resolution or bankruptcy process is subsisting against her, and a bankruptcy process is already pending.

  1. AShe is eligible because her monetary limits are met
  2. BShe is eligible if the bankruptcy process is stayed by the interim-moratorium
  3. CShe is ineligible because a fresh start, insolvency resolution or bankruptcy process must not be subsisting against herCorrect
  4. DShe is ineligible only because her qualifying debts are near the limit

Explanation

Section 80(2)(f) requires that no fresh start process, insolvency resolution process or bankruptcy process is subsisting against the debtor. Meeting the monetary limits does not cure this. The interim-moratorium starts only on filing a valid application and does not remove an existing process.

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