You cab make application to district court in city where you ate staying  for being declared an insolvent 

submit list of your creditors 

3) after inquiry court declares you insolvent 

4) your assets vest  in insolvency registrar for distribution among your creditors 

You can file personal insolvency under Section 94 of the Insolvency & Bankruptcy Code (IBC) before the Debt Recovery Tribunal (DRT).

Process:

1. File application before DRT.
2. Interim moratorium starts (banks can’t recover meanwhile).
3. RP is appointed to check your finances.
4. Either a repayment plan is approved, or if not feasible, you may be declared bankrupt. Then, after liquidation of assets (if any), remaining debts are discharged.

Benefits: Stops creditor harassment, possible waiver of debts, fresh start.

Costs: Around ₹50,000–₹1.5 lakh (lawyer + RP).

Time: 6–12 months for insolvency; 1–2 years if full bankruptcy process.

.

• You can file for individual insolvency in DRT under IBC.
• Once admitted, you immediately get protection from recovery calls, notices, cheque bounce cases, etc.
• Either a repayment plan is worked out or you are declared bankrupt → then assets (if any) are liquidated and balance loans are written off.
• Time: roughly 1 year.
• Cost: ₹1–2 lakh total (lawyer + RP).
• Effect: You get relief from harassment and a legal discharge from debts, but your credit history will be badly affected and future loans will be difficult.

You need to file for bankruptcy before a civil court of competent jurisdiction 

-  As per the RBI, the bank should give proper time and offers for the settlement of loan amount.,  on the ground of health and sudden loss 

- If, the bank is not agreed to give time, then don’t worry and let them to start legal action.

- Firstly, the bank will issue demand notice prior to take legal action from the court. You can reply the same after narrating the sudden loss and inability to pay the loan. 

- Even, if the bank filed a case before the Court, you will have much time to repay the said loan amount and to settle the matter according his present situation.

- If you have no assets or fund to repay the loan amount , then you can file a petition before the court for declaring bankrupt /insolvent.

• In India, you can file for personal insolvency/bankruptcy under IBC, 2016 (at Debt Recovery Tribunal).

• Filing gives an interim moratorium (banks stop recovery).

• A Resolution Professional will try a repayment plan; if it fails, you can be declared bankrupt and assets (except essentials) are liquidated.

• Relief: You’re discharged from debts.

• Time: 1–2 years.

• Impact: Credit score collapses; future loans hard.

 Bankruptcy = last resort, use only if no restructuring is possible.

You have multiple unsecured debts and a secured debt (car loan).

You can approach each bank/NBFC and negotiate one time settlement, though it will impact your CIBIL score but you can close the loans. 

If you cannot repay the car loan you may consider selling the car to the bank to reduce the liability.

If you still insist on insolvency petition alone, then you can approach Debt Recovery tribunal through an insolvency resolution professional (IRP).  The IRP will prepare a repayment plan with your creditors, if the plan fails then DRT may declare you bankrupt and your assets can be liquidated. 

For the time taken and the costs you can enquire locally. 

If the loans are not secured against immovable property and if you don’t own any immovable property, file insolvency petition in the Court of Small Causes. Insolvency petition is an application filed in Court giving details of all your lenders/banks/creditors and your debtors. You can pray to the Court that you are due a certain amount to your creditors but you have lost your business and cannot pay. The Court can recover your due amount from your debtors, if any, and pay to the creditor. The Court will also direct all your creditors not to harass you even if the creditors are not paid. Once order is passed by Court no creditor can force you to pay anything. There is fixed court fee for filing such petition.

Yes, as a private sector salaried person facing overwhelming debt and default risks, you have the option to initiate personal bankruptcy under the Insolvency and Bankruptcy Code, 2016 (IBC). This law allows individuals to seek relief from creditor pressure and obtain a fresh financial start if unable to repay debts. Here is a step-by-step summary of the process and what you can expect:

Personal Bankruptcy Process in India

1. Eligibility

• Any individual unable to pay debts of at least ₹1,000 can apply.

• You must not have initiated similar bankruptcy proceedings in the recent past.

2. Filing the Application

• File the bankruptcy petition at the Debt Recovery Tribunal (DRT) having jurisdiction over your area.

• The petition must include details of all debts, assets, liabilities, and reasons for inability to pay.

3. Moratorium/Stay

• Once you file, the court may grant an interim moratorium, stopping any legal or recovery action by creditors until the case is decided.

4. Adjudication and Repayment Plan

• The DRT will appoint a Resolution Professional (RP) to assess your assets, liabilities, and propose a repayment plan.

• If your assets (after exempted assets like household goods, single house of reasonable value, tools, etc.) are insufficient, the DRT can declare you bankrupt and discharge remaining debts after following due process.

5. Relief

• Bankruptcy provides legal protection from harassment, lawsuits, and collection activities during the process.

• After successful discharge, you are no longer liable for most debts, aiding fresh financial start.

Time & Cost Involved

• Time: The IBC prescribes resolution/adjudication within 6 to 12 months, but it could take longer depending on complexity and DRT load.

• Cost: Filing fees are modest (few thousand rupees); additional costs include nominal legal fees for lawyer/insolvency professional and possibly the RP’s professional fee.

• You will need to prepare and submit financial documents, evidence of debt, salary slips, loan statements, etc.

• Your MOVE will affect your credit history/score for years and impact future credit eligibility.

• Only unsecured debts or non-exempt assets are covered; certain debts (like government dues/fines/maintenance) cannot be discharged.

• You should consult an insolvency professional or lawyer for proper documentation and compliance.

If you need help with documentation, representation, or further guidance, legal support is available.

Bankruptcy is a last-resort remedy but can give you a structured way out if all restructuring options are exhausted.

I have noted the details of your financial situation. Since you are a salaried individual with multiple personal loans, EMIs, and credit card dues that have now become unserviceable, your query about declaring bankruptcy is pertinent. Please find my advice below:

1. Bankruptcy for Individuals under Indian Law

   • In India, bankruptcy/insolvency for individuals is governed by the Insolvency and Bankruptcy Code, 2016 (IBC). However, the individual insolvency provisions of the IBC have been notified only for personal guarantors to corporate debtors. For salaried individuals like you, the old provisions under the Presidency Towns Insolvency Act, 1909 and the Provincial Insolvency Act 1920, are still in force.

   • Practically, in Delhi and most other jurisdictions, an individual debtor can file an insolvency petition before the District Court declaring inability to repay debts.

2. Process

   • You would need to file a petition before the District Court having jurisdiction over your residence.

   • The petition should disclose your income, assets, liabilities, and inability to repay debts.

   • Once admitted, the Court may pass an order of adjudication declaring you insolvent. Thereafter, an Official Receiver will take control of your assets (if any) for distribution amongst creditors.

   • On discharge, you will be legally freed from your debts, subject to conditions imposed by the Court.

3. Effect and Benefits

   • Creditors will be barred from initiating or continuing recovery proceedings against you during the insolvency process.

   • On receiving a discharge order, you are released from most debts (except certain categories such as government dues).

   • However, please note that insolvency proceedings do have long-term repercussions – they affect your credit history, employment prospects in certain sectors, and future borrowings.

4. Time and Cost

   • Time: Typically, 1 to 2 years, depending on the pendency of cases and the complexity of assets/liabilities.

   • Cost:

     • Court fees are nominal.

     • Advocate’s fees for drafting, filing, and conducting the insolvency matter in Delhi generally depend on complexity and duration.

     • If your matter is straightforward (with no objections from creditors), costs may remain on the lower side.

5. Practical Consideration

   • Courts generally encourage restructuring or settlement before declaring an individual insolvent. Therefore, it is important to demonstrate clearly that your liabilities are unmanageable despite best efforts.

If you wish, we can assess your total outstanding, income, and liabilities in detail, and advise whether insolvency is indeed the most suitable remedy, or whether negotiation with banks/credit card companies for one-time settlements may be more efficient.

Best regards,
Advocate Aman Verma
Legal Corridor

Dear Client, 

If your loans have become unsustainable and EMIs are bouncing, you can get relief under the Insolvency and Bankruptcy Code, 2016, where individuals can approach the Debt Recovery Tribunal (DRT) for an insolvency resolution process where a repayment plan is taken into consideration, and if that does not work, you can be declared bankrupt and discharged from debt, so creditor recovery proceedings are halted; the process typically takes 6–12 months, involves filing with the DRT prescribed forms along with accounts of debts, assets, income, and creditors, and while tribunal charges are low, you need to factor in professional/legal expenses that could run between ₹25,000–₹75,000, the greatest trade-off being long-term effect on your credit record but instant protection against harassment and a way towards financial reboot.

I hope this answer helps you. For any further queries, please do not hesitate to contact us. Thank You.