Financial difficulties can sometimes lead to insolvency or even bankruptcy. Bankruptcy is a legal process that allows people and businesses to deal with their debts when they cannot repay them. Although the bankruptcy process is daunting, understanding the process can help you make informed decisions about the financial future of your small business. This article will act as a guide and outline the steps involved in bankruptcy in New Zealand, particularly in relation to small businesses. <\/p>\n\n\n\n
Bankruptcy is a legal status declared when a person or a business operating as a sole trader cannot pay their debts as they are due. The process is overseen by the Insolvency Act 2006<\/em> in New Zealand. <\/p>\n\n\n\n Bankruptcy only applies to individuals, meaning companies cannot be made bankrupt. Instead, companies that cannot pay their debts may face liquidation. For small businesses, bankruptcy may be relevant where the owner is personally liable for the business’ debts. This can happen in the case of sole traders or partnerships. <\/p>\n\n\n\n Bankruptcy offers relief from unmanageable debt. However, it comes with major consequences for small business owners, including:<\/p>\n\n\n\n Some key steps for managing bankruptcy are outlined below. <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\nWhat Are the Consequences of Bankruptcy?<\/h2>\n\n\n\n
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