Rajesh B 12 December 2016

Insolvency petition by a govt employee

I would like to narrate you the entire story so as i get best answer. This pertains to one of my friends family situation. My friend father has a business which is seasonal and runs 7 months in a year with an average income of 1 lakh per month. Not to remain idle the other 5 months, he ventured into other business by borrowing money from some sources to the tune of 25L and incurred losses and shut down that business. He was paying heavy interests on the principal borrowed, he was having a daughter doing job in a Govt bank and earning upto 40K per month so he started to deposit money in chits lifted them and paid to all creditors, the chits were in the name of his daughter and he acted as surety. Now the present situation is their monthly chits payment and all other expenditures is 1.6 Lakhs per month and collective income of him and his daughter is 1.1 lakh per month there by increasing their debt by 5L per annum. Here the tricky thing is the oustanding of all chits is 25L which is taken on his daughter name, she is working in a Govt. bank. Unable to bear the threats and pressure from creditors, the whole family want to commit suicide. The creditors are not in mood to defer payment schedule. I want to know, whether the girl can file Insolvency Petition, since she is govt employee, what will be implications, will she lose job?? Kindly show some way out to this problem...

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5 Replies

Kumar Doab (FIN) 12 December 2016

Govt servant borrowing recklessly and becoming insolvent may face issues of misconduct.

The affected employee may consult with service rules in confidence, a very able counsel specializing in service matters.

Kumar Doab (FIN) 12 December 2016

Suggest her to not to borrow till she gets her matter properly analysed.

Ms.Usha Kapoor (CEO) 13 December 2016

iF THE GIRL FILES iNSOLVENCY PETITION SHE WILL LOSE HER JOB TREATING RECKLESS BORROWING AS MISCONDUCT/. iNSTEAD YOU MEDATE SOME ELDERS AND YOUR CREDITORS COME TO AN ARANGEMENT AND TELL THE CREDITORS THAT !./3 RD OF HER SALARY WOULD BE ATTACHED LIKE A GARNISHEE ORDER IN COURT.i FYOUR CREDITORS APPROACH ACIVILCOURT ALSO TH COURT ATTACHES YOUR MONTHLY SALARY TOWARDS PAYMENT OF YOUR DEBTS TO CREDITORS CALLED GARNISHEE ORDER. iF YOU APPROACH loK 'ADALAT I TWOULD BRING OUT THE SAME SETTLEMENT BETWEEN BOTH OF YOU THAT GIRL AND HER FATHER AND THE CREDITORS, WHICH WILL BE DISPOSED OF WITHIN 1/2 AN HOUR TIME PERIOD.THROUGH MONTHLY INSTALMENTS YOUR DEBTS WOULD BE CLEARED.After obtaining a setlement betwen th edebtors and creditors Lok Adalat would issue adecree which is equal to aivil court decree and binding on both the parties.If you appreciate this answer please give me all my profile likes.

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 ) 13 December 2016

Your friend daughter is not bankruptcy. So your brother can file a petition for bankruptcy. A bankruptcy is when a person voluntary declares himself as an insolvent and goes to the court. On declaring the person as ‘bankrupt’, the court is responsible to liquidate the personal property of the insolvent and distribute it among the creditors of the insolvent. This process is rather amicable which seeks to avoid the threatening calls and gestures of the creditors. It provides a fresh lease of life to the insolvent. However, declaration of personal bankruptcy also has its own disadvantages.