Bankruptcy
In a worst-case scenario, those who cannot pay outstanding debts may apply for relief through the court system under bankruptcy laws. This can be done either voluntarily, if you decide that you are no longer able to meet your financial obligations, or involuntarily, if your creditors think you can no longer afford to repay your debt. Bankruptcy should be considered as a last resort, after all other avenues, including an informal agreement, debt relief order and an individual voluntary arrangement (IVA), have been explored.
In India, declaring personal bankruptcy was almost unheard of in the past, but is becoming less rare. Unfortunately, the laws governing bankruptcy are murky and inadequate to meet the challenges arising from the transformation in personal-credit markets.
