Bankruptcy
Bankruptcy is a formal legal process available to individuals who are unable to pay their debts. It is a serious step and is typically considered only when other options are not suitable or have been exhausted.
In appropriate circumstances, bankruptcy can provide relief from unsustainable debt and create the opportunity for a financial reset. The process ensures that assets are realised and distributed fairly among creditors in accordance with insolvency legislation.
Once a bankruptcy order is made, you are legally required to provide full disclosure of your financial affairs to the Official Receiver and any appointed Trustee in Bankruptcy, and to cooperate with them throughout the administration.
The consequences of bankruptcy are significant. Assets of value, including your interest in your home, may be realised
for the benefit of creditors. If you are self-employed or operate a business, it will usually cease trading. Certain legal
and financial restrictions will also apply for the duration of the bankruptcy.
Being in financial difficulty does not automatically mean bankruptcy is the only solution. Alternative procedures may be available depending on your circumstances, and early professional advice can help you assess the most appropriate
way forward.