While it is good to keep a positive attitude towards your business and life in general, things don’t always work out as planned. Sometimes, people are not ready to face distressing events, such as insolvency or bankruptcy. These distressful situations can drive anyone to a brink, especially if you don’t do something about them immediately.
What is an Insolvency Law?
In Australia, insolvency law helps companies by regulating their position when it comes to financial shortcomings. If a company is not able to make payments on their loans or other financial obligations, they can refer to this specific law.
Insolvency is the absence of solvency — or a company’s ability to pay their loans on time — in an organisation. While companies would want to make their payments, unfavourable financial situations are unavoidable.
What are Your Options When Facing Insolvency?
The first thing that you need to do when facing insolvency is to get help. Hardies Lawyers and other legal professionals recommends hiring a reliable insolvency lawyer who can explain your options. You need to keep an open mind about the situation and don’t stress it too much. The sooner you seek the help of an insolvency attorney, the better. This will help you get back on track in filing for bankruptcy or insolvency.
Here are some of your options:
- 21-day Relief (Interim) – This will allow you 21 days to look for help. You will need to provide the Australian Financial Security Authority (AFSA) a declaration of intent that will present your petition for temporary relief.
- File for bankruptcy – There are instances when creditors wouldn’t grant you any extension or settlement on your debt. Another option for the company is to file for bankruptcy.
You can always refer to the AFSA website for information on bankruptcy and insolvency. Prior to filing, make sure to seek the help of a trusted lawyer to ensure you cover all the needed steps and explore all the options available to you.