When an individual cannot pay their debts as and when they fall due, an application can be made to sell their assets and realise money to pay their debts. This application (known as an Order) can be made either by the individual or it can be enforced by the Court.
An Insolvency Practitioner is appointed (as Trustee) to sell the assets and settle debts in a specified way.
Bankruptcy still carries a lot of stigma but in the right situation, it can be the best option for an individual to clear their debts. It is a process that generally lasts 12 months, after which point the individual’s debts are cleared or written off in full.
For alternative options regarding personal finances, please see our Personal Insolvency page.