Insolvency & Bankruptcy
Obviously there are a number of technical definitions as to what amounts to insolvency and bankruptcy. Irrespective problems are encountered when an individual or entity is unable to pay their debts as they fall due. There may be a number of reasons for this including a loss of or delayed cash flow or the size or timing within which debts have to be paid. Unfortunately many debtors fail to prioritise the manner in which their indebtedness is to be addressed and whether or not some form of instalment arrangement should be entered into with creditors. As the debt ages creditors endeavour to have the debt(s) paid failing which they may engage commercial agents or lawyers to pursue the debt. If direct contact is not successful then a letter(s) of demand is dispatched and if disregarded normally court proceedings ensue.
Initiating process is by way of statement of claim or garnishee where individuals are involved or by way of statement of claim or a statutory demand with companies. Apart from voluntary liquidation, once a judgement debt and a certificate of judgement have been obtained from the relevant court these can be enforced leading to bankruptcy or liquidation depending on the entity concerned. Bankruptcy has serious ramifications for those involved and can lead to the bankrupt’s affairs being administered for a period of up to seven years. Either voluntary liquidation or liquidation means that the company is wound up and ceases to exist as an independent, legal personality. Irrespective of the circumstances the credit of the individual or entity is destroyed for a period of time imposing onus credit restrictions on those involved.
Where companies run into financial trouble and continue to trade they are involved in insolvent trading which is where they have insufficient funds to meet their debts as they fall due. In these circumstances directors of the company become personally liable and may be called upon by creditors to satisfy the debts of the company. Unfortunately over the last 10 years there has been an increase in phoenix company activity. This is where one company transfers all its business assets to another company winding up the first company hoping to avoid paying its creditors.
At LAC Lawyers we do not undertake any insolvency and bankruptcy work where the amount of the debt owing is less than $20,000. During the course of the global financial crisis there has been a severe downturn in business which has led to many people losing their employment and companies incurring debts which they cannot pay. Given that there are serious consequences for directors of companies they need to be mindful that early intervention is required and the first step they should take is to satisfy themselves about the financial position of the company following which they should seek independent legal advice not only about the company’s position but their circumstances as well given that they could be held liable for the company’s debts.
LAC Lawyers works closely with our clients in an endeavour to achieve the best possible results for them in this difficult area. LAC Lawyers will advise secured and unsecured creditors, companies and individuals and their exposures and what consequences this may have for their organisation or personally. We also act on behalf of insolvency practitioners in both bankruptcy and company liquidation matters. Irrespective of what your circumstances are we may be able to assist to protect you from the harshest aspects of bankruptcy or insolvency or if you are an insolvency practitioner to assist you to recover monies from debtors or company directors as appropriate. Should you require professional advice and representation with respect to any debt recovery, bankruptcy or insolvency matter please do not hesitate to contact us now by phone or email.
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Phone LAC Lawyers on NSW 1300 799 888 or VIC 1300 734 638 or send us an email
Insolvency & Bankruptcy Articles
Am I Being Sued?
Date: March 26, 2010
Author(s): Pheba Netto LL.B. (Hons)
This is the question that one would often ask yourself when you receive a letter from a legal firm. Many people often receive mail, emails, faxes, notifications etc in their mail or by personal service, courier and several other methods notifying them that legal action has commenced or that it is being contemplated. To the ordinary man on the street, this alone can cause a lot of stress and worry and be the root of unnecessary panic and anxiety.
Bankruptcy - Advantages and Disadvantages of Bankruptcy
Date: January 16, 2009
Author(s): LAC Lawyers
Bankruptcy involves you handing over control of your property and finances to a Trustee (the person who takes control over your property) in exchange for protection from legal action by your creditors (the people/companies you owe money to). You do not have to have a minimum amount of debts or property to enter bankruptcy.
Bankruptcy - What happens to our house if my spouse is made bankrupt?
Date: December 01, 2008
Author(s): LAC Lawyers
Consider your options by reading this article or for more information call us today.
Bankruptcy & Insolvency Law - What Can I Do If I Am Declared Bankrupt?
Date: April 29, 2009
Author(s): LAC Lawyers
The global economic crisis has no doubt affected millions of people and businesses world-wide. Australia is not immune and coupled with record high unemployment and talks of recession, it is not surprising that many people cannot pay their debts and the instance of bankruptcy proceedings being commenced by creditors has increased as a result.
Business Law - Personal Guarantees & Indemnity
Date: August 04, 2009
Author(s): LAC Lawyers
If you are a supplier of goods and operate your business on a credit system then it pays to protect your position in relation to your debtors. The following scenario depicts a common occurrence in the supplier/purchaser market leading to frustration and ultimately loss of moneys owning.
Debt Recovery - Personal Insolvency Agreements
Date: August 04, 2009
Author(s): LAC Lawyers
If you find that you are overwhelmed with debt and cannot pay all those debts as and when they are due but at the same time you do not want to be declared a bankrupt, you may still have the option of entering into a Personal Insolvency Agreement (“PIA”).
Debt Recovery - The Common Stages
Date: September 24, 2008
Author(s): Adrian Culas LL.B. (Hons.), CLP.
Family Law - The Competing Issues of Bankruptcy and Family Law
Date: January 13, 2010
Author(s): LAC Lawyers
Family law property settlements or applications for spousal maintenance may be further complicated where one spouse is bankrupt or considering bankruptcy. In these circumstances, a conflict clearly arises between the competing interests of a trustee in bankruptcy and the separated non-bankrupt spouse in determining how property should be distributed between the parties.
In Brief - The Steps Involved in Commencing and Running a Civil Action
Date: March 15, 2010
Author(s): Pheba Netto LL.B. (Hons)
A brief rundown of the steps involved in running a cicil action. For more information fill free to call LAC Lawyers on 1300 799 888. LAC Lawyers = RESULTS
Insolvency & Bankruptcy - Unfair Preference Payments
Date: March 07, 2009
Author(s): LAC Lawyers
You run a successful business supplying quality products to a hungry market. Generally your clients are very good with payment however due to the economic downturn some clients have not been able to pay their invoices on time and you have noted that recently that your company has sent out a few reminder letters prompting payment. The majority of those prompted eventually made payment.
Insolvency & Bankruptcy Law - Asset Protection - Can a house be seized from a spouse in bankruptcy proceedings
Date: November 20, 2007
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
Notwithstanding the spectacular growth of the share market and of superannuation funds, the matrimonial house remains the single greatest asset for most people.
Insolvency & Bankruptcy Law - What is Part IX and Part X under the Bankruptcy Act 1966
Date: May 10, 2010
Author(s): Pheba Netto LL.B. (Hons)
Part IX and Part X agreements under the Bankruptcy Act 1966 enable debtors to present creditors with proposals of settling debts. The payments are less than the amount of the debt itself and are paid in full and final settlement of the entire debt.
Insolvency & Bankruptcy Law - You are owed money, what should you do?
Date: May 10, 2010
Author(s): Pheba Netto LL.B. (Hons)
A creditor is someone who is owed money by and individual more often referred to as a Debtor. As a creditor there are several options available to you to recover the debt that is owed to you. The amount of money or debt owed to you will determine the method by which you are able to recover the money from the Debtor.
Insolvent Trading
Date: April 22, 2008
Author(s): LAC Lawyers
Insolvent trading occurs when a company incurs a debt when it is unable to pay its debts as and when they fall due.
Insolvent Trading and Director's Liability
Date: October 12, 2007
Author(s): LAC Lawyers
Directors may be liable, personally, under the Corporations Act, Trade Practices Act, and the OH & S Act, among other legislation. A Director may also be personally liable for non payment of taxes.
Is it the beginning of the end for discretionary trusts and one-man companies - Centrelink, Bankruptcy and Taxation
Date: September 01, 2010
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
Another example is Elliott v. The Secretary of the Department of Education, Employment and Workplace Relations decided in 2008 immediately before the High Court of Australia’s decision in Spry and was concerned with the means test for Centrelink pensions.
Reversal Of Effect Of Sons Of Gwalia Decision - Ending Of Equal Ranking Of Shareholder Claims With Claims Of Unsecured Creditors In Corporate Insolvency
Date: July 30, 2010
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
The Corporations Act will be amended so as to reverse the decision of the High Court of Australia in Sons of Gwalia v. Margaretic. The Sons of Gwalia decision determined that, in a corporate insolvency, certain shareholder claims against a company rank equally with the claims of other unsecured creditors.
The Benefits of Hiring A Lawyer
Date: August 16, 2006
Author(s): LAC Lawyers
The old adage “you get what you pay for” is as true today as it has ever been.
Voluntary Administration
Date: May 04, 2008
Author(s): LAC Lawyers
If a company is having cash flow problems, unable to pay its debts as and when they fall due such as GST, superannuation or creditors then a Director must consider voluntary administration. This enables the company to avoid continuing to incur debts while it is insolvent.
What to expect when you call LAC Lawyers
Date: December 13, 2006
Author(s): LAC Lawyers
LAC Lawyers is a full service firm dedicated to the provision of superior legal services in Australia. Our aim is to provide unrivalled client satisfaction coupled with high quality service and advice. When you call LAC Lawyers our friendly reception staff will spend time with you to identify the area of law your enquiry relates to then pass you on to one of our qualified solicitor's who can help you.
Why stay with your lawyer
Date: August 01, 2006
Author(s): LAC Lawyers
The lawyer/client relationship is a personal one and there are many reasons which will dictate who you can and cannot work with. If you don’t like your lawyer, should you change? Ultimately, the relationship between a lawyer and client must be built on mutual trust.