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CS Professional · Insolvency and Bankruptcy - Law and Practice · Insolvency Resolution of Individuals and Partnership Firms

Kavita's fresh start application was filed on 5 June 2026. She has gross annual income of Rs 58,000, assets of Rs 12,000 and qualifying debts of Rs 34,000, owns no dwelling unit, and is not an undischarged bankrupt. However, an insolvency resolution process application against her was admitted earlier and is still subsisting. Which statement is correct?

Kavita is ineligible. Although her income, assets and debts are within the limits, a fresh start requires that no fresh start, insolvency resolution or bankruptcy process is subsisting against her. The pending insolvency resolution process bars her, even through a resolution professional.

  1. AShe is ineligible, because a subsisting insolvency resolution process bars a fresh start applicationCorrect
  2. BShe is eligible, as all monetary limits are satisfied
  3. CShe is eligible if she applies through a resolution professional
  4. DShe is eligible if the insolvency process is converted into bankruptcy first

Explanation

The monetary figures are within the limits of Rs 60,000, Rs 20,000 and Rs 35,000, but the Code also requires that no fresh start, insolvency resolution or bankruptcy process is subsisting against the debtor. Applying through a resolution professional does not cure this, and a bankruptcy process would be a bar too.

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