Personal Insolvency
What Happens to Your Invoice When a Sole Trader Goes Bankrupt?
When a sole trader goes bankrupt, your invoice becomes an unsecured creditor claim in their estate. Here's exactly what happens next — and what you should do immediately.
What Happens to Your Invoice When a Sole Trader Goes Bankrupt?
When a sole trader goes bankrupt, your invoice becomes an unsecured creditor claim in their estate. Here's exactly what happens next — and what you should do immediately.
Most creditors assume they'll know when a customer is in trouble. In reality, deterioration is visible months before filing — but only if someone is watching the right signals.
A bankrupt sole trader's estate is rarely large enough to pay trade creditors anything meaningful — which is why the invoice you're owed is almost always decided long before the NPII.
Before extending credit to a sole trader, run an NPII check and a QLEI search. Two minutes now is vastly less than months of recovery work if they file.