How to Claim Recovery If Your Builder Becomes Bankrupt

Like some other developers like Noida-Greater Noida's major real estate developer JP Infratech, there is a fear of bankruptcy. At such a time, the worry of home buyers who have stashed money on the projects of these developers is that what will happen to them if developers have become bankrupt now? At a time when the government is giving confidence to the buyers, the Home Byers have also been relieved from the decision of the Insolvency and Bankers Board of India (IBBI). According to this, home buyers can claim recovery from Insolvency Resolution Professional, like other creditors, when the builders go into the bankruptcy category. The National Company Law Tribunal (NCLT) has started insolvency proceedings against Jaypee Infratech. It can also start insolvency process on other default builders.

What is New Decision

IBBI has issued a new form, which can be filled by the home buyers claiming for their recovery. In fact, the Insolvency and Bankruptcy Code states that after the start of the insolvency process, two types of creditors of corporate debtors (borrowing company) have to make a claim for recovery with Insolvency Resolution Professional. These are the first financial credits and the second operating creditors. Financial creditors will include banks or direct lending institutions, while operating creditors will be included in the service providers. Now IBBI has said that apart from financial credentials and operating creditors, the other types of creditors can file a Form 'F' and claim against the Insolvency Resolution Professional.

Open Way for Buyers

Experts believe that by now it was not clear that in the event of the insolvency process being started on any builder, home buyers would be considered as financial credits or operating creditors. But now it will be clear that if there is any liability on the company involved in the bankruptcy category, then they can also claim themselves. It includes home buyers, who gave the money to the company, but neither they got the home nor the money was returned.

Buyers Should Come Forward to Claim

SK Suri of the Association of JP Home Byers told that the forms can be downloaded from the IBBI website. And the more buyers will fill the form and send it to the Insolvency Resolution Professional Anuj Jain, its buyers will benefit. Because later, a committee of all creditors will be formed by the Insolvency Resolution Professional, in which if the majority of buyers are in majority, their claim will be strengthened and the Insolvency Resolution Professional will have to give prominence to the liability of the buyers.