Bankruptcy is the situation where you can no longer pay your bills. For example, you have no more money to pay your creditors such as your suppliers, your landlord or your health insurer. To file for bankruptcy, there must be at least two creditors who can prove that you can no longer pay the bills.
If the judge has declared you bankrupt, you can no longer freely use and use your belongings. This means that you may not (re) rent, (re) buy, donate or borrow anything. You get one trustee assigned (often a lawyer) who receives and processes your mail. The trustee will map out your financial situation and also sell your assets in order to pay your creditors. If you do not have any assets, the bankruptcy trustee will submit a request to the court to lift the bankruptcy. After all, there is no money available to pay off the debts.
An alternative to filing for bankruptcy is submitting a request to be admitted to the Natural Persons Debt Rescheduling Act (WSNP). During the handling of the bankruptcy, conversion can take place to the Wsnp. Click on the following links if you want to know more about bankruptcy en WSNP.
In short, bankruptcy is the situation in which you as an entrepreneur no longer have the prospect of paying your bills. This situation is decided by the judge.