Sole trader insolvency

When a person starts a business by themselves, it is called being a "sole trader". This means they are in charge of everything and get to keep all the money they make. But sometimes, things don't go well and the business is not making enough money to pay all its bills. This is called being "insolvent".

When a sole trader is insolvent, they may not be able to pay their debts (the money they owe to other people). This is not good, because the people they owe money to may need that money to pay their own bills or to buy things they need. In this situation, the person who owes the money (the sole trader) can ask someone else (like a lawyer or an accountant) to help them handle their money problems. This person is called a "trustee".

The trustee's job is to figure out how much money the sole trader owes and to whom. They will then try to work out a plan to get some or all of that money paid back. This may mean selling some of the sole trader's belongings (like their car or their house) to get the money they owe. If there isn't enough money to pay everyone back, the people who are owed money might not get all their money back.

Being a sole trader can be a great way to start a business, but it's important to keep track of the money coming in and going out. If the business is not making enough money, it's important to ask for help before it becomes insolvent. This way, there is a better chance that everyone can get the money they are owed.