Insolvency

You are not able to meet expenses as they become due for payment. You will also be Insolvent if your business assets are less than your debts outstanding. If you cannot find the cash to pay these debts insolvency will lead to bankruptcy.

Bankruptcy can apply to both individuals and sole traders that have given their personal guarantees for loans.

Liquidation and Winding Up applies to companies.

An IVA (Individual Voluntary Agreement) applies to individuals, sole-traders and partners. It normally lasts for 5yrs. An Insolvency Practitioner will calculate how much you can afford to repay each month. 75% of your creditors need to agree and once accepted by all parties payments can commence and creditors can take no further action unless the agreement is broken by you for non-payment. This is an alternative to Bankruptcy.