Corporate Insolvency

When you think your business is in financial difficulty, the hardest thing to do is to admit you need help. However, that’s exactly what you need to do if you want to save your business. Too often, companies call us when their situation leaves no room but to call in the administrators, liquidators or receivers. We try to avoid this wherever possible. Don’t leave it too long to ask for help. You need to speak to one of our advisors if any of the following are happening in your company:

If you’ve been issued with a debt collection notice, it’s because you’ve either ignored attempts to make contact with you to organise payment, or the creditor hasn’t been able to find you and has asked a third party to locate you. Either way, you need to be aware that debt collection notices can become legally binding demands, and failure to respond may constitute admission by silence. If you’ve been issued with a debt collection notice, we can discuss if you wish to organise payment or dispute the claim and plan the way forward.

This is the first court-based collection step and starts court proceedings. If you are issued with a statement of claim, you have 28 days to file a defence. If you ignore the statement of claim and do not file a defence, the Plaintiff (the person who filed the claim), can ask for a default judgement against you. If this is granted there are a number of ways the creditor can receive his monies including writs for possession of land or delivery of goods or a writ of execution where your premises are seized and sold.

A statutory demand for payment is a written warning from your creditor (the person you owe money to). A creditor can ask for this instead of waiting for a default judgment. It’s is issued by the court and you have 21 days from the date of issue to pay the money or have the matter set aside by the court. This time frame is not flexible. If you do not respond to a statutory demand, you won’t have to prove if you can pay the debt, but if your business is solvent. If you cannot prove this, within the strict timeframes, the creditor can apply to have your business wound up. Do Not Ignore This Notice. Seek our legal and financial advice as soon as you receive it.

Winding up notices are issued by the court, on the instruction of the ATO or a creditor. If your statutory demand is ignored or not set aside by the court, and you do not make payment or agree to make payment, your business can be wound up to retrieve funds owed.

With careful planning and negotiating, it is possible to trade-out after being issued with a winding up notice, but it requires solid legal and financial advice.