Insolvency and Bankruptcy Code, 2016 | Part III | Chapter II

Section 80 of IBC, 2016: Eligibility for a Fresh Start Application

Section 80 sets out who may seek a fresh start for qualifying debts, the financial ceilings and the conditions a debtor must satisfy.

Important commencement distinction: The fresh start process under Chapter II of Part III has not been brought into force by the 15 November 2019 notification. That notification commenced specified personal-guarantor provisions from 1 December 2019, but expressly excluded the fresh start process from section 78 and did not commence section 80. The eligibility rules below describe the enacted statutory framework, not a generally available filing procedure.

On this page

Meaning of Section 80
Seven eligibility conditions
Important legal definitions
How the proposed process works
Commencement and practical position
Official legal sources

Section 80: Eligibility for making an application

Section 80(1) provides that a debtor who is unable to pay a debt and satisfies the requirements of subsection (2) is entitled, subject to the relevant provisions being in force, to apply for a fresh start for discharge of qualifying debt under Chapter II of Part III.

Section 80(2) provides for an application by the debtor personally or through a resolution professional to the Adjudicating Authority, provided all seven statutory conditions are met.

Seven conditions under Section 80(2)

Clause (a) - Annual income: Gross annual income must not exceed Rs. 60,000.
Clause (b) - Assets: The aggregate value of the debtor's assets must not exceed Rs. 20,000.
Clause (c) - Qualifying debts: Total qualifying debts must not exceed Rs. 35,000.
Clause (d) - Bankruptcy status: The debtor must not be an undischarged bankrupt.
Clause (e) - Dwelling unit: The debtor must not own a dwelling unit, whether encumbered or unencumbered.
Clause (f) - No concurrent proceedings: No fresh start process, insolvency resolution process or bankruptcy process may be subsisting against the debtor.
Clause (g) - Prior fresh start order: No previous fresh start order under the Chapter may have been made in relation to the debtor in the 12 months preceding the application.

These requirements are cumulative: meeting only the three financial limits is not sufficient.

Eligibility at a glance

Test	Statutory requirement
Gross annual income	Not more than Rs. 60,000
Aggregate assets	Not more than Rs. 20,000
Qualifying debts	Not more than Rs. 35,000
Home ownership	No dwelling unit, even if mortgaged
Bankruptcy / other processes	Not an undischarged bankrupt; no concurrent process
Earlier fresh start order	None within preceding 12 months

Relevant definitions and connected provisions

Qualifying debt - Section 79(19)

A qualifying debt is a liquidated contractual amount due, including interest or other contractual sums, but excludes an excluded debt, a debt to the extent secured, and a debt incurred during the three months before the fresh start application. Accordingly, not every liability counts towards the Rs. 35,000 ceiling.

Excluded debt - Section 79(15)

Excluded debts include court or tribunal fines, damages for negligence, nuisance or breach of legal obligations, maintenance liabilities, student loans and any other prescribed category.

Undischarged bankrupt - Section 79(22)

An undischarged bankrupt is a bankrupt who has not received a discharge order under section 138.

Adjudicating Authority - Section 79(1)

Part III generally defines the Adjudicating Authority as the Debt Recovery Tribunal. However, section 60 provides for National Company Law Tribunal jurisdiction in matters concerning personal guarantors to corporate debtors. Jurisdiction depends on the relevant statutory scheme and commencement.

Section 78 - Scope of Part III

Section 78 addresses the applicability of Part III to fresh start, insolvency and bankruptcy matters concerning individuals and partnership firms, subject to commencement and notification. Its minimum-default provision must not be confused with the separate qualifying-debt ceiling under section 80.

Fresh start procedure contemplated by the Code

Section 81 describes an interim moratorium on filing an application and the required disclosures; section 82 deals with appointment of a resolution professional; sections 83 to 91 govern examination, admission, objections and the moratorium; and section 92 concerns the discharge order. These provisions must be read with their commencement status, and no automatic moratorium should be assumed under an uncommenced process.

Current applicability and personal guarantors

The Central Government's notification S.O. 4126(E), dated 15 November 2019, brought specified Part III provisions into effect on 1 December 2019 only insofar as they relate to personal guarantors to corporate debtors. It expressly covered section 78 except with regard to the fresh start process, section 79 and sections 94 to 187, among other provisions. It did not commence section 80. The operative personal-guarantor insolvency process therefore should not be mistaken for the Chapter II fresh start procedure.

Before considering any filing, check subsequent commencement notifications and the applicable rules on the official sources below.

Official legal sources

Legal information updated for October 2026. This page explains statutory provisions and does not constitute legal advice.