Better individual bankruptcy laws
Government is streamlining individual bankruptcy law.
One can become debt freeby filing for bankruptcy. It will impact businesses in informal sectors, small borrowers and entrepreneurs.Currently it mirrors the corporate bankruptcy laws, which harms defaulters. The new law will focus on mediation. As soon as the new law is passed, debtors and operation creditors can trigger insolvency.
There will be three slabs. The first slab will be upto INR 35,000. Defaulters, who do not have any asset or income will get the waiver. The next slab will be above INR 35,000 upto INR 10 lakhs. The third slab will be above INR 10 lakh. For the last two slabs defaulters will have to undergo either through voluntary or compulsory mediation. If parties fail, the case will go to the debt recovery panel.