What Exactly Is Personal Insolvency? Personal insolvency occurs when an individual is unable to generate finances to pay back their pending debts, usually for a long period of time. To come to an agreement with those to whom he owes money, the individual files a Personal Insolvency Agreement (PIA). This agreement involves appointing a trustee, […]
The swift and stark economic downturn experienced during COVID-19 and its adverse effects on business have brought companies on their feet, causing a serious situation where they have to survive on bare-minimum.
What Does it Mean For a Business to Go Bankrupt?
Bankruptcy refers to a legal process where the business is unable to pay off its debts. There are two main types of bankruptcies:
- Voluntary Bankruptcy: where an insolvent debtor decides to lodge a petition in the court to declare himself or herself as bankrupt.
- Involuntary Bankruptcy: a legal proceeding where the creditors force a business to be declared bankrupt when they do not get their money back.
How Has COVID-19 Led to Bankruptcies?
Succumbing to the implications brought by the COVID-19 pandemic, every business is struggling to make do with the situation at hand. Companies like Hertz and J. Crew have already filed for bankruptcy: the coronavirus has exposed many companies to a range of financial risks, and coming out of this mess may sound like a tough job, nut need not be.
What Can Brisbane Debt Solutions Do to Help You?
At Brisbane Debt Solutions, we can help you with:
- Our trustees, liquidators, lawyers, accountants, and advisors who will guide you through these difficult times and provide honest yet helpful advice together with all the necessary paperwork.
- Our prices are extremely reasonable and affordable because we understand that your finances may be tough already.
- We will help you consider your current circumstances and advice over your future business prospects before concluding.
Avail your first free consultation today and get in touch by clicking here!
When Is A Company Insolvent?
A business can be called ‘insolvent’ when it is unable to pay off its debts due to a negative cash flow or has liabilities that exceed the ratio of its total assets. Under the dictates of the Australian Securities and Investment Commission (ASIC) – the regulatory body for insolvent businesses in Australia – the most common exit options for an insolvent corporation include:
- Voluntary Administration
How Has COVID-19 Pandemic Led to Corporate Insolvency?
When COVID-19 struck the world with its disastrous nature, it was difficult to analyze the impact it would have on Wall Street’s 11-year old bull market. As the cases took an incredible pace, economies all over the world got battered, stock markets plummeted, and the employee redundancies took unbelievable proportions – the pandemic indeed brought a significant amount of damage with itself, and businesses have suffered dramatically under the circumstances. As the conditions further deteriorated, they went from breaking-even to making significant losses!
What Can Brisbane Debt Solutions Do to Help You?
In order to help your corporation get over corporate insolvency and financial crisis in times of COVID-19, Brisbane Debt Solutions offers:
- Bespoke, business-centric solutions that reduce the stress of insolvency;
- Practical and speedy services that help you tackle even the most complex insolvency challenges;
- Consistent insolvency support to help you attain the outcome you need with minimal hassle.
Redeem your first free consultation service today and sit down with us to talk about your business – we are all ears! Click here for further details.
Why Would A Company Go Bankrupt?
Oftentimes, directors, shareholders, and entrepreneurs face a myriad of problems that can threaten their company’s position in the economic world. Under rapidly evolving conditions, directors try to mitigate the negative toll on business by making quick decisions regarding their fiduciary duties – this, sometimes, can take a terrible turn and cause financial losses, which reduces the company’s ability to pay off debts.
How Can a Business Go Bankrupt?
Two things can happen:
- The directors file for bankruptcy (voluntary bankruptcy): The Australian Financial Security Authority (AFSA) will process the lodged application and decide within 24 to 48 hours after considering every aspect of your business.
- The creditors file for the bankruptcy (involuntary bankruptcy): They will give you 21 days to pay your debts off, but if you are still unable to do so, the court will proceed with the creditor’s application and declare you bankrupt.
How Can Brisbane Debt Solutions Help You?
As licensed, qualified and experienced professionals in bankruptcy and personal insolvency matters, we are adept at offering valuable advice to struggling businesses and processing their cases. We understand your struggles better than anyone else in this field; you have our guarantee for that. Our experts are there to guide you throughout your bankruptcy proceedings – should you decide to go for it. We can also provide consultation and advice after considering your financial statements, and let you know if going for bankruptcy is a wise decision.
Give us a call today at 1300-88-70-93 or visit us at Level 7, 190 Edward Street, Brisbane, Australia, 4000.
Filing for Bankruptcy
When you are filing for bankruptcy, the first and foremost obligation is to have a trustee who will manage your bankruptcy. This can either be an official trustee or a registered trustee. The bankrupt individual may nominate a trustee of their own as well.
Filing for bankruptcy may allow for some financial ease, but it comes with several obligations on the part of the one declaring it. An individual who is filing for bankruptcy is obligated to provide any information that a trustee requires of his or her past and current financial situation. This includes all your bank statements, salary slips, details of all assets, details of all debts, and all other business incomes.
Obligations and Consequences
Once you have filed for bankruptcy and your application is accepted, your employment and income are taken into account and if you earn over a certain threshold, you must make compulsory payments. Your ability for travelling or crossing borders is restricted as well and you are not allowed overseas travel, or you must obtain permission from your trustee in order to be able to do so.
Next, your trustee contacts the creditor or creditors and notifies them of your bankruptcy which prevents you and the creditors from contacting each other for debts. As it is the trustee who is managing your bankruptcy, you may not sell any assets without permission, while your trustee is able to sell all of your assets including all of your properties and your personal house. You are, however, allowed to keep certain household items, tools that you need for work, and one or more vehicles. All of these items have set limits of monetary value that you are not allowed to exceed.