Insolvency works slightly differently for individuals and companies:
If you can’t pay back your personal debts on time, you can go insolvent by applying for bankruptcy, an Individual Voluntary Arrangement (IVA), or a Debt Relief Order (DRO). This will help you organise reduced repayments and write off debts that you’re unable to repay – we’ll advise which is the best option for you.
In some cases, a creditor can force you into insolvency by applying to the court for a bankruptcy order if you don’t repay your debts. This usually takes at least three to four months.
Companies that can’t pay their debts can also organise voluntary arrangements to manage repayments. Other, more restrictive options in more serious cases include liquidation and administration.
Creditors can force you into administration in a matter of hours if your debt has lapsed for too long.
Once both individuals and companies are insolvent, their assets will be sold to repay creditors in a strict order of priority.