Part III - Insolvency Resolution and Bankruptcy for Individuals and Partnership Firms

Chapter II - Fresh Start Process

Section 81 IBC 2016: Application for Fresh Start Order

Section 81 of the Insolvency and Bankruptcy Code, 2016 governs an application for a fresh start order after an eligible debtor applies under Section 80. It provides for an interim moratorium from the filing date and specifies the information that must accompany the application.

Text of Section 81

81. Application for fresh start order.

(1) When an application is filed under section 80 by a debtor, an interim-moratorium shall commence on the date of filing of said application in relation to all the debts and shall cease to have effect on the date of admission or rejection of such application, as the case may be.

(2) During the interim-moratorium period -

(i) any legal action or legal proceeding pending in respect of any of his debts shall be deemed to have been stayed; and

(ii) no creditor shall initiate any legal action or proceedings in respect of such debt.

(3) The application under section 80 shall be in such form and manner and accompanied by such fee, as may be prescribed.

(4) The application under sub-section (3) shall contain the following information supported by an affidavit, namely -

(a) a list of all debts owed by the debtor as on the date of the said application along with details relating to the amount of each debt, interest payable thereon and the names of the creditors to whom each debt is owed;

(b) the interest payable on the debts and the rate thereof stipulated in the contract;

(d) the financial information of the debtor and his immediate family up to two years prior to the date of the application;

(e) the particulars of the debtor's personal details, as may be prescribed;

(f) the reasons for making the application;

(g) the particulars of any legal proceedings which, to the debtor's knowledge, have been commenced against him; and

(h) confirmation that no previous fresh start order under this Chapter has been made in respect of the qualifying debts of the debtor in the preceding twelve months of the date of the application.

Interim Moratorium Under Section 81

The interim moratorium begins automatically on the date the debtor files the Section 80 application. It operates in relation to the debtor's debts and continues until the application is admitted or rejected.

Pending legal action or legal proceedings in respect of the debtor's debts are deemed to be stayed during the interim moratorium.
A creditor cannot initiate legal action or proceedings in respect of such debt during this period.
The interim moratorium ends when the fresh start application is admitted or rejected.

Information Required With the Application

Section 81(4) requires the application to be supported by an affidavit and to disclose material financial and personal information. This includes the complete debt position, contractual interest, security, financial information of the debtor and immediate family for the preceding two years, prescribed personal particulars, reasons for seeking a fresh start, known legal proceedings and confirmation concerning any previous fresh start order within the preceding twelve months.

Relationship With Section 80

Section 80 prescribes the eligibility conditions for making a fresh start application. Section 81 addresses what happens when such an application is filed, including the interim moratorium and the required application information.

What Happens After Filing?

The succeeding provisions of Chapter II deal with appointment of a resolution professional, examination of the application and its admission or rejection. In particular, Section 82 deals with appointment of the resolution professional and Section 83 deals with examination of the application.

Current Commencement Position

Section 81 belongs to the fresh start process under Chapter II of Part III. The Central Government notification bringing specified Part III provisions into force from 1 December 2019 for personal guarantors to corporate debtors did not bring the fresh start process into operation for that category. The statutory provision should therefore be read together with the applicable commencement notifications before any filing is contemplated.

Important: The statutory text describes the fresh start application and interim moratorium, but practical availability of the process depends on commencement of the relevant provisions and the applicable rules for the category of debtor concerned.

Official Legal Resources

For the current statutory text, refer to India Code. For the Insolvency and Bankruptcy Code, rules, regulations and notifications, refer to the IBBI legal framework.

Last reviewed: 30 September 2026.