News on Medial

Small debt dominates bulk of bankruptcy settlements

Livemint · 1y

A majority of companies defaulting on small loans in India are opting to settle their disputes out of court rather than going through lengthy bankruptcy proceedings. Data from the Insolvency and Bankruptcy Board of India (IBBI) shows that around 80% of out-of-court settlements for bankruptcies were for debts up to ₹10 crore ($1.3 million), while only 1% of settlements were for debts of ₹1,000 crore ($133 million) or higher. Smaller companies find it easier to arrange smaller amounts of money to repay creditors, thereby avoiding the risk and consequences of bankruptcy.