An entity or a person is said to be insolvent they are not in a position to honour its financial obligations towards its creditors. Poor management of business, increased expense, and reduced cash flow could lead to insolvency and the insolvent company is charged in order to pay off the debts owed and the company may be put to liquidation including sale of assets. Fortunately, resolution approaches are available which includes restructuring of debt which allows the stressed company to pay off its debt over an extended period of time and on modified terms. A borrower can even negotiate with lenders on debt recovery and settlement agreements.
An Insolvency Professional is an Indian Insolvency and Bankruptcy Board (IBBI) licensed professional. They are registered with an insolvency firm and are involved in the process of finding a resolution for an insolvent entity, company, LLPs or partnerships. These professionals are entitled to act on behalf of such insolvent individuals, businesses, etc. Insolvency practitioners play a vital role in liquidating the entity's properties and other forms for mediation during the restructuring case.