Bankruptcy
a) an organisation will become 'bankrupt' whenever it can't pay off its debts caused by insufficient money in the bank.
b) an organisation can become 'bankrupt' whenever its liabilities (or what it owes) rise above its assets (such as properties, stock or what it is owed).
In the UK or in Europe, the very first circumstance will generally tip a company into liquidation except in cases where it had some kind of rescue plan.
Under the second situation, known as 'balance sheet insolvency', the business can easily prevent liquidation by discussing with its creditors.
Just to help to make matters all the more complicated , UK firms won't go bankrupt anyway - the term is mostly reserved for personal bankruptcies.
Organisations not having enough cash instead go into a Company Voluntary Arrangement (CVA), go into administration or receivership, or are wound up.
Personal bankruptcy is the procedure of releasing oneself from enormous debts so that you can have a fresh start. You can now go file for personal bankruptcy, including individual associates of a partnership. With bankruptcy you will need to sell all your high value possessions so funds can be shared out fairly between your creditors. Having said that, you should attempt and look for debt help well before all this happening.
The Courts are accountable for setting up a bankruptcy order against individuals.
The assets of the bankrupt person then simply fall under the control of a Trustee. This can be either the Official Receiver (a civil servant and officer of the Court), or a licensed Insolvency Practitioner. The person who is appointed will then be responsible for unearthing as much as is possible regarding the debtor's assets and liabilities followed by getting as much as they can for the creditors from the assets readily available.
Once a personal bankruptcy order has been filed your creditors cannot trouble you for any money. Payments will become the lone task of the Trustee.