Billie is the sole proprietor of an antique shop. She recently purchased new premises and her new mortgage payments have increased. Billie had thought the new shop would increase her trade but turnover has actually fallen and she is no longer able to pay her debts. Billie owes at least $50,000 to two different trade creditors Paradise Antiques Ltd and County Lease Ltd. She has also failed to pay the last three installments on her mortgage on her home which is worth $500,000 but on which she owes $450,000.

Advise Billie:

(a) What options and alternatives are available to her and the advantages and disadvantages of each?

(b) What steps would be taken before and after a bankruptcy?