is bankruptcy the same as insolvency

moneybuster

is it the same in the business world a friend of mine is in administration and are becoming insolvent what happens to there debts to suppliers and personal loans credit cards etc

regards moneybuster

nervousmother

is it a limited company? if it is LTD then they would still be liable for personal debts.. but not for company debts unless they acted as guarantor

moneybuster

many thanks for that.

so insolvency dose it carry any restrictions like bankruptcy, they have another business as well a shop will that be affected by the insolvency.

regards mb

nervousmother

If the business is LTD and that goes bust.. then no as long as the other business and shop is not linked to the ltd company they will be kept seperate.

well known that a ltd company builds up debt the directors close it and open another... sometimes removing assets first dont know how but they seem to get away with it.. like i say it depends if they are LTD

debtinfo

Hi just to fill in a few definitions.
Insolvency is a general term meaning that a legal entity (a person or a ltd company) cannot afford to pay their debts.

For an individual there are several formal types.
1) a personal administration order - normally for debts under £5000 (i think)
2) a Debt Relief Order (less than £15,000 of debts)
3) An IVA - An agreement to pay back a smaller proportion of of your debt in monthly installments.
4) A Bankruptcy

For ltd companies the options are
1) A Company administration order. An IP takes over the running of the company in an effort to either restructure or sell on as a going concern.
2) A CVA - An IVA for companies.
3) Liquidation - Via a Winding up order - Like a bankruptcy for companies