Small Borrowers to Get Debt Relief Under New Personal Bankruptcy Scheme

Small borrowers with annual income up to ₹60,000 are likely to get automatic relief for any unsecured loans they are unable to repay, according to a new scheme for personal insolvency resolution that the government has prepared, Mint reported. The new scheme that will replace colonial era laws dealing with personal bankruptcy will also give breathing space to those who can repay loans. It will also protect some of their assets from dues recovery to help in their subsistence. The scheme prepared by the Ministry Of Corporate Affairs and the Insolvency and Bankruptcy Board of India (IBBI), which oversees the bankruptcy ecosystem, will benefit small informal financial creditors as well as partnerships and proprietorships, the legal form most small and medium enterprises take, according to details of the scheme disclosed by IBBI in its latest monthly bulletin. Read more