Insolvency Experts Brisbane

Insolvency is a legal term to describe a situation in which a debtor that cannot settle their debts.

Personal Insolvency

In most cases, cash flow insolvency occurs when a debtor lacks cash flow and cannot pay debts that are due. Debt can come in many forms including credit cards, medical fees, student loans, rent arrears, utility bills or tax.

There are two options available to an individual with unmanageable debt – a personal insolvency agreement (PIA) or debt agreement.

Corporate Insolvency

Balance sheet insolvency occurs when a company’s liabilities far exceed its assets. The three most common company insolvency types are voluntary administration, liquidation, and receivership.

Involuntary administration, an administrator is appointed, and he/she will do all they can to either save the company or help it get into a position where it can settle debts.

If the company cannot be saved, it will go into liquidation. The administrator will sell the company’s assets to pay debts, and the company will wind up.

In receivership, a secured creditor appoints a receiver to sell company assets to pay debts owing to them.