Being a sole trader while bankruct

[tomgallagher]

If you setup a business as a sole trader while bankrupct is this allowed? I understand that you cannot be a director but I thought being a sole trader was allowed?

[LimeLegal]

You will need to notify the official receiver and will find it very difficult to operate a bank account or to obtain finance. Your new income will be taken into account by the official reciever.

[Eagle]

What happens if you make yourself bankrupt - does your bank close down your accounts? Can you continue running a sole-tradership or do you have to cease trading? If so, that sounds a bit daft...

[LimeLegal]

It doesn't work like that, the Official receiver will have to be notified and all income will be taken into account. The main aim of the bankruptcy though is NOT to stop someone rebuilding their business life and this 2nd chance is enshrined within the law.

have a look at http://www.insolvency.gov.uk/guidanc...bankruptcy.htm for more details and particularly this portion

Quote
There is nothing to prevent a bankrupt from being self-employed. So you can start to trade again, subject to restrictions. You will be responsible for keeping accounting records for this business and for dealing with the tax and VAT requirements for the new business. You will need to register again for VAT if you meet the registration requirements. You should not continue to use your pre-bankruptcy VAT registration number
Unquote

[Nick Dyer]

One major restriction a bankrupt may face could be the £500 maximum credit rule.
Creditors may not like the idea of offering credit to an undischarged bankrupt.

[Eagle]

Thanks.
What's the difference between bankruptcy, insolvency and an IVA?