If you cannot pay your debt because of unemployment, a court case(court decree), bank loans, trade debts or loss of stock or property, you have the following options:

1. Talk to your creditors – Informally talk to your creditors to consider restructuring your debt.
2. Bankruptcy – Bankruptcy is a legal process where you are declared unable to pay your debts. It can release you from most debts and allow you to have a fresh start. When bankrupt, a Trustee is appointed to manage your property. Bankruptcy automatically lapses after three (3) years.
3. Individual Voluntary Arrangements (IVA) – This is an arrangement where the debtor makes a proposal to creditors to offset his debt.
4. Summary Instalment Order – This is a formal arrangement where the debtor pays off his debts in instalments.
5. No Asset Procedure – Here the debtor is relieved from paying some of his debts so long as he does not have any realizable assets to repay the debt. The debtor is mandated to pay alimony, child maintenance and education loans for a dependent child or step-child.

When a company cannot pay its debts, you can explore the following options:

1. Liquidation – The Liquidator sells the company’s assets to pays its creditors. Once the assets are sold and creditors paid, the Liquidator closes the company.
2. Administration – This is an alternative to liquidation where an Administrator is appointed to run the company. The company would be maintained or sold as a going concern so as to enhance value for the benefit of its creditors.
3. Company Voluntary Arrangement – This is an arrangement where the company makes a proposal to its creditors to offset its debts. This option involves the restructuring of debts over terms agreeable to both the company and its creditors.
4. Administrative Receivership – This is where a Receiver is appointed by a lender, with a security created before the enactment of the Insolvency Act in 2015, to sell off or manage that security. Unlike the above options, the office of an Administrative Receiver is a transitional office specifically established to cater for these pre-2015 securities.

If you need guidance on any of the above options, you may explore the following options:

1. Seek legal advice from a practicing lawyer.
2. Visit the Official Receiver’s office at 17^th Floor, 316 Upperhill Chambers, 2^nd Ngong Avenue, Upperhill. Or visit our website https://brs.go.ke/official-receiver.php