The main aim of the bankruptcy code is to generate a dedicated class of insolvency professionals who would help organisations through the process of bankruptcy. Insolvency information services will collect, collate, verify and publish financial data from listed companies and about the operational and financial creditors of companies.
A database will be generated to offer information on the insolvency status of persons. When an insolvency order is passed, the person’s personal assets will be vested with the Official Assignee who is appointed by the GOI. The assignee allocates the assets among the insolvent’s creditors.
When a person declares himself insolvent voluntarily and approaches the court, it is called bankruptcy. If a person is declared ‘bankrupt’, the court will liquidate the personal property of the insolvent person and allocate it among his creditors.