Any individual can go bankrupt, including a sole trader, an individual member of a partnership, or a company director who has given a "personal guarantee" to their suppliers or bankers.
Bankruptcy can be sought, either voluntarily or involuntarily:
Voluntarily by the debtors themselves, who have to fill in some forms/questionnaires and take them to their local county court and pay the bankruptcy filing fee which as of March 2014 is £705.00 per person, or partnership (some of the court costs can be claimed back by a person filing who is on certain defined benefits).
Involuntarily by the creditor owed money (the debt minimum is £750.00) please note that you can still be made bankrupt by a creditor, even if you refuse to acknowledge the proceedings.
Filing for bankruptcy voluntarily is a simple matter and a first time bankrupt will generally be "discharged" one year after the date of the order (sometimes the discharge period can be less than one year). Fewer stigmas are attached to bankruptcy today, but as with all insolvency processes the consequences need to be fully understood before making a decision.
Read our two part blog series on the positives of bankruptcy and the negatives of bankruptcy
You may be eligible for a Debt Relief Order – read our blog: What is a Debt Relief Order and who is eligible?
Act now and get professional bankruptcy advice for free from 4Squared.