Insolvency and Personal Assets and Liabilities of a sole trader
Unlike a director of a Limited company, in an insolvent situation a sole trader is personally liable for any debts (liabilities) owed by both himself personally and by his sole trading business. As a sole trader is personally liable for business debts, those business creditors can attack his personal assets as well as his business assets when trying to obtain repayment of their debt.
In the same way, business assets of a sole trader can be pursued by personal creditors.
Due to this, when in financial difficulty a sole trader usually not only worries about the implications on his business, but also about losing his home and personal property.
This section of the site explains about the options available to protect personal assets against liabilities when insolvency looms . Please click on the left hand index for further information.