M/s ABC through Ankit, the proprietor, approached you as professional, to seek direction about its business. He says, that the business is in distress and there are heavy debts, thus unable to run the business. He wants

M/s ABC can be advised to take recourse of Fresh Start Process under Insolvency and Bankruptcy Code, 2016 (IBC Code). Following are the brief provisions of Fresh Start Process (FSP): As per the given facts of case, M/s ABC is eligible to take of Fresh Start Process (FSP), under section 80 of IBC Code. An application u/s 81 can be filed for FSP by M/s ABC itself or through Resolution Professional with prescribed fees containing the following information supported by an affidavit, namely: - a list of all debts owed by the debtor as on the date of the said application along with details relating to the amount of each debt, interest payable thereon and the names of the creditors to whom each debt is owed; the interest payable on the debts and the rate thereof stipulated in the contract; a list of security held in respect of any of the debts, the financial information of the debtor and his immediate family up to two years prior to the date of the application; the particulars of the debtor's personal details, as may be prescribed; the reasons for making the application; the particulars of any legal proceedings which, to the debtor's knowledge has been commenced against him; the confirmation that no previous fresh start order under this Chapter has been made in respect of the qualifying debts of the debtor in the preceding twelve months of the date of the application. Where an application under section 80 is filed by the debtor through a resolution professional, the Adjudicating Authority (AA) shall direct the Board within seven days of the date of receipt of the application and shall seek confirmation from the Board that there are no disciplinary proceedings against the resolution professional who has submitted such application. On receipt of confirmation from Board, AA shall confirm appointment of RP. Where an application under section 80 is filed by the debtor himself and not through the resolution professional, the Adjudicating Authority shall direct the Board within seven days of the date of the receipt of an application to nominate a resolution professional for the fresh start process. On nomination by Board within 10 days, AA shall appoint RP. The RP will examine application and submit report to AA, recommending acceptance or rejection of application u/s 83, within 10 days of his appointment. AA will pass order u/s 84, based on report by RP to admit or reject the application, with 14 days from submission of report by RP. On the date of admission of the application, the moratorium period shall commence in respect of all the debts. The moratorium ceases to have effect at the end of the period of one hundred and eighty days beginning with the date of admission unless the order admitting the application is revoked under sub-section (2) of section 91. Any creditor mentioned in the order of the Adjudicating Authority under section 84 to whom a qualifying debt is owed may, within a period of ten days from the date of receipt of the order under section 84, file his objections to RP only on the following grounds, namely: - (a)inclusion of a debt as a qualifying debt; or (b) incorrectness of the details of the qualifying debt specified in the order under section 84. As per section 92, the RP will prepare a final list of qualifying debts and submit such list to AA. Based on that AA will pass discharge order w.r.t. qualifying debts.