Insolvency and Bankruptcy law in India-Appointment of Insolvency Professional

In this expanding world, competition is increasing with every second of every minute. And due to this competition, the problem of unemployment is increasing day by day. With the increasing employment and even more increasing competition, it is becoming next to impossible to find a stable job. This goes for persons in every field. But the most affected area in the field of law and arts. Attorney, or commonly known as a lawyer, practices the code and make ordinary people aware of the rules and rights. Apart from this, the work of the lawyer also provides advice to their clients for their business, their taxes, court rulings, legal documents and also argues for cases in courts.

What are the problems related to insolvency?

Insolvency or commonly known as Bankruptcy is the problem in which a person becomes unable to pay the loan taken by him from some bank. In such cases, the bank declares the person bankrupt and ceases his property and all his belongings unless he can pay the sum properly with all other fees. There are many factors which can lead to insolvency or Bankruptcy. Some of them are mentioned below.

  • Improper Cash-Flow

The major cause of insolvency is the improper flow of cash. This problem arrives mainly for business with improper credit flow. With a lack of money at a needed time, the owner of the company will not be able to pay his lends and thus can go bankrupt.

  • Delayed Payments

Delayed payments from consumers or other big consumers is also a problem. When other companies take your product in their manufacturing process, a trade is being made. If in this trade, one part that is the money flow part is delayed, the main company eventually will not be able to maintain the cash flow and can lead to insolvency.

  • Creditors problems

There are sometimes even problems in negotiation. Negotiation in business plays an important role and must be taken calmly even as the decisions which are made in a business and decisions which are important with it. Arguing won’t solve anything and will only make things worse for everyone, especially for the company and the owner. Arguing with your creditors or the persons who are involved in the flow of money can lead to a bigger money problem at a later stage and so, must be solved immediately.

  • Lack of Investment

This is the most important point of all. One must ensure everything before stepping into the business. If you have little investment, use it wisely and properly. Don’t just go and spend everything. First of all, invest. The investment should be big enough to save you if you are going to fall into the problem of insolvency. So that you can save you and your company at the most needed time.

  • Improper money management

This is also proper. Even if you are big business and have a lot of money flowing in, improper use of money can become turmoil and can create really big problems. Make sure that your finance team is doing well and is well versed in their work. Spending money efficiently and saving for any future crisis will be the best course of action one must take to get rid of any situations that can lead to bankruptcy.


So, even after all this, take proper measures, have a good and professional insolvency lawyer at your command. It will help you getting out of the situation way before the problem arrives so that you will be able to fully concentrate on your work and make the best of it.