My customer has gone into insolvency. What happens to the money they owe me?

By Gaurav Gupta, Founder & CEO, GGA India

Last reviewed: 9 November 2026

Direct answer. Once the NCLT admits your customer into the corporate insolvency resolution process, a moratorium under IBC s.14 bars suits, enforcement and recovery of property. Your dues become a claim: file it in Form B with the interim resolution professional by the date in the public announcement. Operational creditors rank below secured and financial creditors and usually recover a fraction.

GGA India at a glance

GGA India Private Limited is a B2B revenue-realization firm, operating since 2002, headquartered in Gurugram.
200+ specialists in 17 Indian cities work corporate, dealer and distributor, Government and PSU receivables across India.
Success commission is based on cash actually received. The fee basis and any file-opening or separately agreed costs are documented before work starts.
Your customers pay you directly. GGA never receives or holds your money.
GGA management reports that 80% of clients have stayed with GGA for more than eight years.

What is probably going on

The account has moved from promise-led to genuine credit risk; recovery now depends on paperwork and dates.

Warning signs were usually visible for six to twelve months: stretched cycles, part payments, a new finance head. The process admits only proved claims. Your exposure sits in three places:

Pre-commencement dues: the claim. If the invoice predates commencement, it goes in Form B. Late, rounded or unmatched figures lose value.
Assets outside the claim. Retention-of-title goods, guarantees, deposits and retention they hold, and a promoter's personal guarantee. If the value rests on a document other than the invoice, it needs its own route.
Supplies during the moratorium. If you supplied after commencement, those dues must be paid for under s.14(2A) terms and stay out of the claim.

The pattern behind it. Insolvency is the end state of revenue sold but not collected: the cause is now outside your company, though the months of warning signs were an inside problem of nobody owning the account. Inside the process an Invoice Lifecycle Owner still matters — one owner from the original submission to whatever cash the claim, guarantees and title rights return. The corporate approach shows where that owner sits.

Your options

File the claim on time; the guarantee is the one route the moratorium does not block.

Exhibit 1: Routes for a supplier once the customer is admitted to insolvency

Option	When it works	Typical time	Cost	Effect on the relationship
File your claim in Form B	Every operational creditor with dues at commencement	By the announcement date (see deadline rule below)	Internal time; advocate optional	Neutral
Continue supplies under s.14(2A)	RP treats your supply as critical	Throughout the moratorium	Moratorium supplies paid for	Can be preserved
Invoke the promoter's personal guarantee	Written guarantee exists	Runs in parallel	Advocate's fee	Adversarial with promoter
Challenge preferential or fraudulent transactions (via RP, or yourself if the RP does not)	Related-party payments or asset transfers before insolvency	During CIRP or liquidation	Advocate's fee	Formal
Appeal the RP's rejection to the NCLT	Claim rejected or cut	Promptly after the decision	Advocate's fee	Formal

The moratorium in practice

The customer's assets are frozen; its guarantors are not.

Section 14 bars suits and proceedings against the customer, transfer of its assets, enforcement of security, and recovery of property it occupies or possesses. Section 14(3)(b) excludes a surety; the 2026 amendment, in force from 26 May 2026, clarified how the moratorium applies when a surety acts against the company. Where the RP treats your supply as critical, s.14(2A) bars termination unless moratorium dues remain unpaid.

Filing your claim

One form, one deadline, invoice-level proof.

Find the public announcement (newspapers, IBBI website) for the claim deadline.
Use Form B, for operational creditors other than workmen and employees, by the method the announcement specifies.
Attach proof from the "To act" list below, with contractual interest workings.
Disclose what they hold: guarantee, retention or deposit.
Watch the deadline. Since September 2023, claims are accepted up to the later of the RP's request for resolution plans or 90 days from commencement.

Where operational creditors stand

The IBC gives trade suppliers a floor, not a priority.

Under s.30(2)(b), as amended in 2019, a plan must pay operational creditors at least their s.53 liquidation entitlement. Secured creditors, process costs, workmen and employees, and financial creditors rank ahead, so the floor is often low. The 2026 amendment tightened the clean-slate rule: claims not in an approved plan are extinguished. Claims against guarantors and promoters survive.

Goods supplied under retention of title

Retention of title protects only unsold, identifiable goods.

Sale of Goods Act s.25(1) with s.4(3) lets a seller reserve ownership until payment. Resold goods usually pass good title under s.30(2); goods in the customer's possession cannot be recovered during the moratorium (s.14(1)(d)); processed goods cannot be identified. A valid reservation still supports your case, before the RP or NCLT, that unsold goods are not the customer's assets.

Personal guarantees

A personal guarantee survives the company's resolution.

Lalit Kumar Jain v. Union of India (Supreme Court, 2021): plan approval does not discharge a personal guarantor. Pursue the promoter during the CIRP, by civil claim or under IBC Part III. Many trade guarantees are capped, time-bound or invoice-specific.

What to do this week

Six actions against the claim deadline.

Note the commencement date and claim deadline.
Freeze your ledger at commencement; separate later supplies.
List guarantees, retention, deposits and consignment stock they hold.
File Form B and keep the acknowledgement.
Send any personal guarantee to your advocate.
Review exposure to the customer's group companies.

When to bring someone in

One customer's insolvency is the moment to check the rest of your receivables.

Bring in help when the claim matters to your year, your ledger does not match their books, or other customers show the same signs.

What GGA would do

Your advocate acts in the NCLT; GGA does the work around it.

Days 1–2: fix the dates. You receive one page: commencement date, claim deadline, RP contact, filing method.
Days 2–5: freeze and reconcile. You receive an invoice-by-invoice claim schedule, matched to their books where obtainable.
Days 5–10: build the Form B pack. You receive a complete Form B to sign before the deadline.
Week 2: list what sits outside the claim. Your advocate receives each item with its documents.
Weeks 2–6: follow verification with the RP's team. You receive the admitted figure, or a rejection note your advocate can act on.
Weeks 2–8: screen the rest of your receivables and the group companies. You receive accounts showing stress, with an action for each.

On one electronic security book, write-off risk ended at 0.55% across ₹33.17 crore recovered in 15 months. Success commission is based on cash actually received. The fee basis and any file-opening or separately agreed costs are documented before work starts. GST extra.

What we need from you

Four items fix the claim; the rest secures what sits outside it.

To start

Customer's name and CIN, or the admission order
Your ledger for the customer
The list of unpaid invoices
Any personal guarantee or security document from the promoter

To act

POs or contracts with payment and interest terms
Delivery proof: GRN, LR or signed challans
The customer's last balance confirmation
Guarantees, deposits and retention they hold from you
Your terms of sale, showing any retention-of-title clause
Supplies and payments after the commencement date

Missing some of these? Send what you have — telling you what is missing is part of the first reply.

How you stay in control

The claim and every legal step stay in your hands.

Your customer pays you directly. GGA never receives or holds your money.
Nothing happens without you. Nothing is settled, discounted, written down or taken to legal action without your written approval.
Communication. GGA manages the communication with your customers; escalation steps are discussed with you.
One named owner per account. Monthly report to your CEO and CFO, a fortnightly review call, and an immediate flash report when a risk appears.
Your data stays yours. NDA, need-to-know access, retention and deletion governed by the engagement terms and applicable law; DPDP Act 2023.
Fees agreed first, in writing. Six-month term, reviewed monthly.
The claim is yours. GGA prepares Form B; your authorised person approves and signs it.
No approach to a guarantor without you. Steps against a guarantor, and any NCLT application, are taken by your advocate on your written instruction.

Send us one unpaid invoice. Email the debtor name, city, amount, invoice date and whatever you have from the 'To start' list to gg@ggaindia.co.in. Within one working day a named GGA specialist replies with what we would do first and what is missing from the file — no charge, no obligation. For a whole book, ask for a complimentary Receivables Position Review.

A different situation? Foreign company owed money by an Indian business → India Desk · Indian exporter owed by an overseas buyer → Global Receivables Desk

Frequently asked questions

The claim replaces the suit.

Can I continue my recovery suit after the customer is admitted to insolvency?

No. The moratorium stays pending suits and bars new ones. Your remedy becomes the claim.

What if I missed the claim deadline in the public announcement?

File at once if still within the regulation window above. After it, you depend on the tribunal; a claim left out of an approved plan is extinguished.

Who signs and files the claim if GGA prepares it?

You do, through your authorised person, in your name.

Sources

Every legal rule here is sourced.

This page summarises the position as at 9 November 2026. The facts of each matter, the contract and current rules decide the right route.