IBC law has been in force with the aim to give a revival opportunity to all the debtors as well as offers relief to all the creditors. There are two types of creditors at present.
- Operational creditors
The operational creditor is a person to whom the debt is owed or any other person to whom the debt has been assigned or transferred to. In order to ascertain whether a person would fall within the definition of an operational creditor, the debt owed to such a person must fall within the definition of an operational debt as defined under Section 5(21) of the IBC.
An operational debt is defined under section 5(21) of the IBC to mean:
“a claim in respect of the provisions of goods or services including employment or a debt in respect of the repayment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority”.
- Financial creditors
Financial creditor means a person to whom a financial debt is owned or to whom the debt is legally transferred. It includes the debt amount along with the interest. Financial debt considers the value of money with respect to the time. In case, if any corporate person offers financial assistance to the debtor against the interest of the total amount then it is considered as financial debt. Like home buyers have to make advance payments to buy a particular real estate property such as a flat, apartment or unit.
Advantages of IBC for creditors:
- Easy process for filling the petition, one needs to file a petition within a specific time
- There is complete transparency during the whole process
- Time-bound processes are there in order to receive the recovery of the debt
- Timely recovery of the amount along with the interest to creditors
- Distress assets have been identified on time
You just have to file a petition under section NCLT u/s 7 or 9 or 10 of IBC to start the process.