Introduction

One of the principle aims of the Insolvency and Bankruptcy Code, 2016 (“Code”) is resolution of insolvency of corporate persons, firms, and individuals in an effective, efficient and time bound manner. Chapter III of Part III of the Code deals with insolvency resolution and bankruptcy for individuals and partnership firms, including personal guarantors. Section 5(22) of the Code defines the term ‘personal guarantor’ as an individual who is the surety in a contract of guarantee to a corporate debtor. Rule 3 (1) (f) of Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 (“Rules”) also defines a guarantor as a debtor who is a personal guarantor to a corporate debtor and in respect of whom guarantee has been invoked by the creditor and remains unpaid in full or part.  Continue Reading Personally Guaranteeing the Creditors’ Gain