Bankruptcy is an option for individuals only. However, this does include individuals who have a business which trades in their name or are in a partnership.
A sole trader or individual can file for bankruptcy if there are no illegal dealings, fraud or recklessness. In some instances they can be discharged from bankruptcy within one year.
Bankruptcy proceedings would free you from debts and enable you to make a fresh start, although some restrictions may apply.
The Bankruptcy process can be commenced by either:
- a creditor’s petition to the court;
- a debtor’s petition to the court; or
- the Supervisor of an Individual Voluntary Arrangement petitioning the court;
The bankruptcy may be advertised in the local newspaper and London Gazette and will be entered on a register.
Some assets may not be incorporated in the bankruptcy. These include furniture required for domestic use, a vehicle to enable you to get to work, tools of the trade and your pension.
Your share of the equity in your home would usually be realised and the trustee has the power to take action to enforce this. However, all home owners would be kept aware of any intended or commenced actions.
Debts that are not written off when your bankruptcy ends include fines, maintenance and child support payments and other family court orders, debts to secured creditors, such as your mortgage company and other debts arising from personal injury, fraud and other criminal proceedings.