If you’re overwhelmed by debt and feel like you’ve run out of options, bankruptcy might offer the reset you need. It’s a formal insolvency process designed to help individuals deal with debts they can’t repay. While it’s often seen as a last resort, it can also be a powerful step towards a clean financial slate.
Looking for immediate help? Call our experts for free, confidential advice on how bankruptcy works, what it means for your assets and credit record, and what to expect during the process—so you can make an informed decision with confidence.
What is bankruptcy?
Bankruptcy is a legal process. You can apply voluntarily as an individual, or you could be forced into it by a creditor when you or your business is in an insolvent position and cannot recover.
As a sole trader you’re personally liable for your business’ debts. This means that bankruptcy can impact your personal wealth, as well as your business’ assets. If you own any property, such as a family home, this tends to be sold to help with payments to your business’ creditors.
What’s the Bankruptcy process?
If you or a creditor believe this is the only possible path for your business, a petition for a Bankruptcy Order needs to be presented in court. If you’re applying for sole trader bankruptcy for your own business, please seek the advice of a licensed insolvency practitioner. Not only can we look at ways to avoid bankruptcy completely, we can also help you complete the complex forms that need to be submitted as part of the bankruptcy process.
If the Bankruptcy Order is approved, the court will appoint an official receiver to take control of your assets. The receiver will then organise for the valuation and sale of these assets to pay your creditors.
At the end of the bankruptcy period, which is usually 12 months, any remaining debts are written off. The bankruptcy will remain on your credit rating for six years and you’ll be unable to hold some positions inside a business, such as director.
Insolvency and bankruptcy is often a stressful time for everyone involved. As licensed insolvency practitioners, we’re specialists in this area. We can give you expert advice on your current challenges and could help you recover your financial position without the need for bankruptcy.
