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My Business Is Bankrupt – What Are My Options?

Last updated: September 17, 2021

The quick answer

Although you may be deep in debt it may be possible to avoid bankruptcy (or liquidation if you are a partnership or company) if you have a viable business or assets to sell. However, in some cases, going bankrupt may be the best option just to give you a clear start. Bankruptcy only applies to individuals, sole traders and partners in a business, not the business entity itself.

In more detail

Bankruptcy Trigger Points

There are usually a handful of trigger points that make a business realise it is in trouble. These are:

  • Being unable to pay the employees.
  • The bank calls in its loans or overdrafts.
  • A bailiff calls and seizes goods.
  • Receiving County Court Judgements.
  • HM Revenue and Customs start bankruptcy proceedings.

There are others trigger points as well such as a review of your monthly accounts with your accountant.

What Are My Options If My Business Is Bankrupt?

When your back is against the wall (with debts) the first decision to be made is whether or not the business could be viable in the future?

If it is viable, then there are a variety of options to avoid bankruptcy or liquidation. These are an Individual, Partnership or Company Voluntary Arrangement or a pre-pack administration.

If not viable then the usual solution is bankruptcy or liquidation. In both cases, it will be worth talking to a licensed insolvency practitioner first to make sure that you are choosing the right option for you and to understand any potential downsides – for example, losing your home, the effect on your credit rating or the implications of any guaranteed debts.


If you need insolvency advice the earlier you talk to someone like us the better as you will have more options. We can help, contact us today.

More questions in this section

Author: David Kirk - ACA FABRP
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Just a quick email to say a heartfelt thank you for your very calm, considered, expert advice regarding my circumstances on Tuesday. Things looked bleak before you explained my options much more clearly, in simple layman’s terms.
Rob Elliott (14th December 2021)



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David Kirk

Licensed Insolvency Practitioner