Bankruptcy is a widely used term often used to refer to both businesses and individuals going bust.
In reality the legal use of bankruptcy applies only to individuals.
Bankruptcy is based on old law and in nature is very inflexible.
Bankruptcy is can be very effective in resolving personal debt problems. It’s the one method that will write of all (with a few legal exceptions) debts. So an individual may go bankrupt and be left with no requirement to pay any money back.
The flip side of this is that all non-essential assets of the individual will also be caught with the bankruptcy and will be used to pay whatever their value is across to the individual’s creditors.
Not all assets would be take away from the Bankrupt individual usually a necessity level of assets would be left behind along with the means for the bankrupt individual to work.
It is possible that a Bankrupt individual can be asked to make a contribution from their monthly income to make some amends to creditors where it is seen fit to do so.
These contributions may be requested for a period of time after the maximum one year of formal Bankruptcy is over.
Though Bankruptcy will rarely last for more than one year, such contributions can last well beyond the one year period.
You may file for your own Bankruptcy, certain Court charges will apply. Alternatively you could wait for a creditor to file for your Bankruptcy, though not all will go this far.
Following the flow of in severity of solutions, from Informal Arrangement, Debt Management to Individual Voluntary Arrangement to Bankruptcy. It can be seen that those facing Bankruptcy may not have many alternatives where there is not a regular surplus monthly income to make a dent in outstanding creditors.