If you’re a sole trader, YOU are your business. All of its debts and all of its liabilities are yours personally.
If the business becomes insolvent, creditors will be able to access your personal assets (including your home) to obtain re-payment of any debts.
However, with a sensible and realistic approach to the level of debt you incur in your business this need not be a reason to avoid operating as a self-employed Sole Trader.
Not all business risks are financial so you need to be confident you can deliver what you promise your customers. You must abide by legal, safety or national standards of your product or service. Most risk can usually be covered by one of the many professional insurance providers.
