The Australian insolvency laws focus on regulating the position of the companies facing financial distress. A person or a company facing insolvency has several options like voluntary administration, liquidation, and receivership.
If your business is facing insolvency, trustees may sell the assets to pay the creditors, and eventually, your business will be closed down. If you do not want such things to happen, you need to contact insolvency lawyers Sydney. Here are some financial situations where you will need a lawyer by your side.
You Need Help in Restructuring Your Debt
According to 2021 financial data, NSW, and cities like Sydney, recorded 3281 personal insolvency cases. The lawyer will represent your side and work with creditors to negotiate agreements and finalise new repayment schedules that allow a company or individual to pay off all debts without becoming insolvent.
You Need to Prepare Debt Agreements
Preparing a new debt agreement is a fundamental part of debt restructuring. According to recent financial data, NSW, especially Sydney, recorded 2415 debt agreements in 2019. A debt agreement refers to a legal agreement between a debtor and a creditor. Australia’s Part IX(9), also known as the debt agreement, is legally binding on both parties. It may involve conditions like:
● You agree to pay a percentage of your combined debt in a certain period.
● The debt payment is not paid to creditors directly. Instead, you pay instalments to the debt administrator mentioned in the agreement who will make payments to creditors.
After the agreement and payment end, the creditors cannot recover the rest of the debt you owe.
An insolvency lawyer plays a crucial role in negotiating and drafting debt agreements. The attorney will discuss the payment schedule with both parties and include the conditions accordingly.
You Need to Enter a Personal Insolvency Agreement
As per 2019–20 insolvency data, NSW recorded 40 personal insolvency agreements. A PIA is a flexible way to settle your debts without declaring bankruptcy. The PIA requires the appointment of a trustee to take control of the assets and make an offer to creditors, and the offer may include paying debts in instalments or lump sums.
The PIA is an informal option available under the Bankruptcy Code. Insolvency lawyers in Sydney can help formulate personal insolvency agreements and appoint a trustee who can overlook repayment of debts.
The lawyer will also explain the implications of entering a personal insolvency agreement as your name appears in the public register that may affect your employment opportunities and ability to get credit.
You are an Heir to an Insolvent Estate
If a person dies before paying off their debts, the administrator or executor creates a plan to sell assets and repay debts they owed during death. If you are an heir of an insolvent estate, you need to consult an insolvency lawyer to decide a future course of action.
According to the latest data, Australia recorded 14 cases of insolvent estates in 2019–20 and nine cases in 2020–2021. Many people misunderstand that as an heir to an insolvent estate, they are liable to their parent’s debt, which is not true. The rules surrounding insolvent estates are cloudy, and you need a legal expert by your side to make the right decisions.
To sum up, these are some situations when you need to consult insolvency lawyers.
Related Posts
CEO Wanted
