Many people confuse company insolvency with bankruptcy, but they are not interchangeable terms. If a company is insolvent or close to it, an administrator receives, or liquidator may be appointed, you are either unable to meet your debt obligations on time, or the value of your liabilities exceeds that of your assets. Bankruptcy, however, is the legal process that a person or company follows to resolve their insolvency predicament. Not every entity that becomes insolvent will file for bankruptcy, as the issue can sometimes be resolved, but all companies or people declared bankrupt are considered to be insolvent.
PCL Lawyers is your trusted firm of insolvency experts in Melbourne. We regularly assist businesses who are owed money and help them avoid becoming insolvent themselves. Get in touch to see what we can do for you.
If a debtor is a company, an insolvency lawyer will serve them with a Statutory Demand for Payment of Debt. This is used either following a court judgment or if the debt cannot be disputed and provided the debt is for at least $2000.
The company will have 21 days to apply to have the statutory demand set aside, provided there are valid grounds. Otherwise, if there is not a satisfactory arrangement made with the creditor, they will have the right to start wind-up proceedings in either the Supreme Court of Victoria or Federal Court of Australia. Read more about company insolvency here.
Personal Insolvency ultimately results in an arrangement with creditors such as Part Nine or Part Ten Agreement, or bankruptcy.
Prior to that time, there will typically have been legal proceedings and a court judgment for the debt amount plus costs and interest.
The bankruptcy process can be a swift one. Once a court judgment is obtained, it can be a very effective tool in getting the debtor to pay. A person served with a Bankruptcy Notice must take the matter seriously and will be well served to seek expert legal advice.
PCL Lawyers in Melbourne are experts in the field that can offer quality insolvency and pre-insolvency advice. Sometimes company liquidation or personal bankruptcy is not the only resolution. Timely and appropriate legal advice from experienced insolvency lawyers at this time will likely be of great assistance.
Call us today on 1300 907 335 to discuss your situation or alternatively fill in the form on this page and we will respond to you promptly.