IBBI amends Regulations for Personal Guarantors to Corporate Debtors: New Procedure for Non-Submission of Repayment Plan Introduced

Through an amendment to the IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019, effective from May 19, 2025, the IBBI has added Regulation 17B which establishes a clear procedure for resolution professionals when guarantors do not submit repayment plans.

The newly inserted Regulation 17B, titled “Non-submission of repayment plan”, provides that where no repayment plan has been prepared by the debtor under section 105 of the Insolvency and Bankruptcy Code (“IBC”), the resolution professional shall file an application before the Adjudicating Authority (“AA”). This application must:

• Intimate the non-submission of a repayment plan
• Be filed with the approval of creditors
• Seek appropriate directions from the AA

The new provision fills an important procedural gap in the personal guarantor insolvency resolution framework by establishing a clear pathway for resolution professionals when faced with non-cooperative guarantors who fail to submit repayment plans. By requiring creditor approval before approaching the Adjudicating Authority, the regulation ensures that any decision to seek directions regarding non-submission has the support of the financial stakeholders in the process.

This amendment aligns with the broader objectives of IBC to provide time-bound resolution of insolvency while balancing the interests of all stakeholders. It offers a structured approach to address delays or non-cooperation in the repayment plan submission process, potentially reducing the time taken to resolve personal guarantor insolvency cases.