Bankruptcy is a much-confused concept that in reality applies only to individuals. It applies where an individual owes more to their creditors that they have assets available to pay, or indeed when they simply cannot make payments due.
An individual can either file for their own bankruptcy (there are some costs) or wait for a creditor to bankrupt them.
It is the level of the ‘gap’ between the value of the assets held and the amount due to creditors that will usually determine whether an individual should consider an alternative to bankruptcy such as an IVA.
Bankruptcy now runs for a maximum of 12 months.
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