Insolvency Vs Bankruptcy – When Does Each One Apply in the UK?
Insolvency happens when companies or individuals’ financial obligations outweigh their assets. When companies are unable to pay off debts when they are due, they are insolvent.
Many companies and individuals face insolvency each year. Some are able to quickly resolve the issue, whilst others are forced to take serious measures in order to deal with their problems.
What is bankruptcy?
Bankruptcy is a form of insolvency. Individuals become bankrupt when courts decide they are insolvent and unable to pay off their debts.
To become bankrupt, individuals must owe at least £5,000. People can apply to become bankrupt, or the decision can be made for them. The person that oversees the bankruptcy process is called the Official Receiver.
Many people decide to become bankrupt when options like Debt Management Plans, Debt Relief Orders and Individual Voluntary Arrangements are not suitable for their requirements. Bankruptcy is often regarded as a last resort.
If you are worried that you might be about to become insolvent, it’s wise to seek out professional advice at your earliest opportunity. It’s possible to get help with avoiding insolvency – at Irwin & Company, we may be able to help you chase up your own debtors, arrange a sole trader voluntary arrangement and negotiate with your creditors to create an informal arrangement. We can also advise you on selling assets to help you avoid insolvency and bankruptcy.
Why choose Irwin & Company?
We have more than a quarter of a century’s experience to draw upon and have the expertise needed to help you prevent a financial worst-case scenario.
We leave no stone unturned in order to save you from personal insolvency and bankruptcy and can provide you with clear, simple advice to help you find out exactly where you stand financially.