The term Insolvency is not defined in the Insolvency and Bankruptcy Code, 2016 (IBC), but UNCITRAL Legislative Guide on Insolvency law defines the term. Insolvency occurs 'when a debtor is unable to pay its debts as they mature or when its liabilities exceed the value of Assets.’ Bankruptcy is a legal status. Insolvency is a financial condition. An insolvent company or a debtor is unable to meet its obligations as they become due or its liabilities exceed the value of its assets. When a debtor is unable to pay its debts and other liabilities as they become due, legal system is required to provide a legal mechanism to address the collective satisfaction of the outstanding claims from assets of the debtor. A range of interests are required to be addressed and accommodated by such legal mechanism. There may be many parties affected by the proceedings, including the debtor, the secured creditors, unsecured creditors, employees, guarantors, suppliers of goods and services etc. The mechanism that is required to be adopted should not only strike a balance between aforesaid stakeholders, but also be relevant to social, political and other policy considerations that may have an impact on the economic and legal goals of the insolvency proceedings.