• Filing IP petition

Dear sir, my father runs a small business. 2years back he took debts from local lenders for more interest, bank loans and business creditors.once GST started at time onwards (from past 10months) his business was running dull and inorder to clear the debt he took loan from banks and local lenders. The chain continued like that and now he is in debts for more than 80lakhs with business creditors, bank loans and local lenders.He is 55+ in age and his health is not cooperating to continue his businesses and clear his debts. He or my mother didn't have any asset on their name except bike. I recently purchased house and is in loan and paying monthly installments. I am a small scale pvt employee and i took personal loan for 10lakhs and given to my father. my10+ years earnings will not be enough to clear those debts and now I am in trouble to survive my wife and kid with all his burdens. Can you please help us in guiding the process of filing ip for my father and tell about its consequences. Will i be liable to pay his debts? Approximately how many days does the process of completing ip usually take? Does my house will be recovered and does I am liable to pay my father debts?? How does my father need to outcome from this situation??
Please help us with correct process to take forward.

Thank you.
Asked 4 years ago in Business Law

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7 Answers

You are not liable to pay your father debts

2) Your house would not be sold to repay father debts

3) your father can take legal proceedings to be declared an insolvent

4) contact a local lawyer

Ajay Sethi
Advocate, Mumbai
87932 Answers
6207 Consultations

5.0 on 5.0

1) You are liable to pay your father's debts if you are continuing with his business. If you show that you are separated and and that is not your concern that will save your life little bit.

2) Try to alllocate all your father's asset and repay maximum principle amounts tell creditors and bank you are unable to give interest.

3) And get set small installment for long-term repay of loan.

Ganesh Kadam
Advocate, Pune
12335 Answers
191 Consultations

4.9 on 5.0

If you are father have no property then it is better to file insolvency petition that will at least leave him from bank loans and creditors but in case of local lender who is not registered in as lender there could be a personal problem as he will try to realise his money from you as well and for that purpose you have to declare that you have nothing to do with the business of your father and report to the police in this regard.

As soon as he is declared insolvent and there is no inherited property from him to you in your responsibility gets over and you may take care of them.

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

As mentioned earlier you are not liable to pay your father debts

2) your father should declare himself as insolvent

Ajay Sethi
Advocate, Mumbai
87932 Answers
6207 Consultations

5.0 on 5.0

Sir father can file a insolvency petition before the District court under Provincial insolvency act to declare him insolvent and bankrupt, You wont be liable to pay his debts.

The father need to make a statement of the debts and the assets and all the creditors are need be made respondent in the Insolvency petition.

The process take some time in the district court and the court examine issue to its satisfaction.

Engage an Advocate of district court he will file same.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

Sir ask father to go for insolvency further you wont be liable all fathers asset will be sold if any to clear the dues.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

As per the Hindu Succession Act, 2005, Son is not liable to pay back his father's debt out of anything that he had made out of his own income or savings. He is only liable to pay out of what was his father's property and his inheritance in the same.

Insolvency petition can be filed at a district court having jurisdiction in which the debtor resides or carries on business. If the debtor has already been arrested or imprisoned, then the insolvency petition can be filed where he is in custody. Once an insolvency petition is filed, the Court can appoint an interim receiver after presentation of the insolvency petition or before an order is made. On making an order of adjudication, the property of an insolvent individual would vest with the official assignee or the receiver and becomes divisible among the creditors.

Mohammed Mujeeb
Advocate, Hyderabad
19031 Answers
32 Consultations

4.5 on 5.0

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