Bankruptcy information

 

Bankruptcy information is available from a variety of sources, but for information particular to you, you should contact an insolvency expert. A bankrupt is a person who has become, or will become, unable to pay their debts. Although the term bankruptcy refers to an individual, it is often the case that the individual becomes bankrupt through the course of a failing business.

In company law the concept of limited liability applies, to ensure that the debts of the business do not become the debts of a director. However, if a creditor perceives the risk to be too high they may not agree to lend money to a company, but will ask a director to personally guarantee a debt. If the bankrupt is a sole trader, or part of a partnership, the failing business will then draw on the director’s personal assets to pay the debts of the business and as a result the individual may become bankrupt.

An insolvency solicitor will be able to offer information on bankruptcy that may help you if you cannot pay your debts. For example, bankruptcy is not the only option for an individual unable to pay their debts. An insolvency expert will be able to look at the debtor’s position and discuss repayment options with creditors. Creditors may agree that it is better to have a longer payment period, or receive a reduced sum, than it is to allow the individual to become bankrupt, where they may get less, or none, of their debt repaid. These types of arrangements are known as Individual Voluntary Arrangements or IVAs.

If you would like to obtain legal advice on bankruptcy, information on Individual Voluntary Arrangements, or any other related information, Caven can put you in touch with a local specialist Insolvency Solicitor free of charge. So, if you have any questions or would like our help in finding local Insolvency Solicitors please call us on 08001 221 2299 or complete the web-form above. 

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