Melbourne Insolvency and Bankruptcy Services

What is Insolvency?

The term ‘Insolvency’ is often used in regards to a business or a company however it can also apply to an individual. A company is considered insolvent if it is unable to pay its debts as they become due. It is illegal for a company to continue trading and incur further liabilities whilst it is insolvent.

Is my company insolvent?

If you are unsure whether your company/business is insolvent, you have come to the right place! Our insolvency lawyers are trained professionals in determining whether a company is insolvent or not. Inquiries into the financial records of a company as well meeting with directors will all be undertaken in the process of determining a company’s status. Obtaining advice in regards to insolvency is crucially important as it is an offence to trade whilst insolvent.

How can we help?

Our Melbourne Insolvency and Bankruptcy Services team are able to assist in all avenues regarding insolvency. Generally, there are 3 courses of action in such a situation:

  1. Liquidation – Usually through a court process initiated by the creditors, a liquidator is appointed to close the company, sell the assets and pay the outstanding debts.
  2. Voluntary Administration – This occurs when the company voluntarily appoints an administrator to investigate and report on the company’s history and financial position after which the administrator makes a recommendation about its future. The recommendation may be to liquidate the company, return control of the company to the directors or possibly pursue a Deed of Company Arrangement which is a compromising arrangement agreed on by the directors and creditors.    
  3. Receivership – A receiver is generally appointed over an insolvent company by the court or a secured creditor. The assets are realised and the funds distributed to the secured creditors. A receiver can be appointed simultaneously to an administrator or liquidator.

The earlier a potentially insolvent company takes remedial action the greater the likelihood of a positive outcome. Contact our Melbourne Insolvency and Bankruptcy Services team to assist you with your insolvency matter today!

What is Bankruptcy?

In Australia, ‘bankruptcy’ is used specifically in the case of an individual rather than a company/business. A person facing financial issues may declare themselves bankrupt or alternatively, a creditor that is owed money can make an application to the court to force the debtor into bankruptcy.

When an individual is declared bankrupt, a Trustee in Bankruptcy will take over and manage their property, assets and liabilities. The trustee will sell assets in order to raise funds and pay off as much debt as possible. A bankrupt person may have restrictions imposed on them such as not being able to travel overseas or work in certain professions. Bankruptcy will generally last 3 years and be on record for 7 years however if all the creditors are paid in full then the trustee can annul the bankruptcy.

How can we help?

Bankruptcy is a last resort! Our trained bankruptcy lawyers will assist in every manner possible to avoid a bankrupt declaration. The alternatives to bankruptcy include entering into a debt agreement or a personal insolvency agreement which both involve less time and restrictions than bankruptcy. Another avenue can include negotiation with creditors for an informal repayment arrangement thereby avoiding both insolvency or bankruptcy.

The earlier a financially distressed individual takes remedial action, the greater the likelihood of a positive outcome. Contact our Melbourne Insolvency and Bankruptcy Services team to assist you with your bankruptcy matter today!

Our Melbourne Involvency Lawyers Office

8/181-185 St Kilda Rd,
St Kilda VIC 3182

Tel (03) 8554 3800
Fax (03) 9017 8945
Email info@warlows.com.au

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