It’s a process in the UK too, abuse of which could lead to the courts imposing sanctions ranging from barring the directors from company directorship all the way to piercing the corporate veil and holding directors liable for the company’s debts.
Corporate insolvency requires an “insolvency practitioner” to be appointed by the directors; this is a regulated profession, and this ensures that the company is wound up according to the regulations and statutes.
You cannot just “declare bankruptcy” in the UK either.
The US concept of bankruptcy is basically unimaginable in most (all?) of Europe.
There's an old movie, The Edukators, where one of the protagonist is effectively broke and working a low wage job but has spent years already and has many years more left to pay off a debt she incurred by accidentally crashing into an expensive car without insurance.
This situation is basically impossible in the US where the term "uncollectible" is used to describe such debts.
I don't know about other countries, but in Germany there is Privatinsolvenz which is a personal bankruptcy that would resolve this exact scenario.
Of course it would first be covered by mandatory insurance you have to have when driving a car (if you're not legally allowed to drive a car, well, you're on your own)
FWIW Privatinsolvenz is not instant although the duration was shortened from the very excessive 7 years down to a more reasonable 3 years. During insolvency you're also prohibited from founding/owning companies or freelancing, though.
