Lawyers Advising on Insolvent Trading, Unfair Preferences Claims, Personal Bankruptcy & Company Insolvency.
Call Us: (03) 7071 0425
Are you facing an Insolvent Trading, Breach of Director Duties or An Unfair Preference Claim? We can help.
Insolvent trading occurs when a company incurs debts it cannot pay, breaching duties under the Corporations Act 2001 (Cth). Directors can face personal liability and civil penalties. Unfair preferences involve transactions where an insolvent company pays a creditor more than they would receive in liquidation. Liquidators investigate these transactions when a company enters liquidation and may commence proceedings to recover payments, making legal advice crucial for directors.
Liquidators play a critical role in insolvent trading claims. They are obliged under the Corporations Act to investigate the existence of any insolvent trading claims when a company enters liquidation. If they find evidence of insolvent trading, they can take appropriate action, including commencing proceedings against directors to recover compensation for creditors.
This underscores the importance of directors seeking expert legal advice to navigate these complex issues and protect their interests.
our team specialises in defending against insolvent trading and unfair preferences claims. We offer comprehensive support to protect your interests, with years of experience in insolvency law and a proven track record.
When directors face ATO penalty notices, liquidator claims, or ASIC investigations, you need lawyers who understand how these proceedings really work. At Insolvit, we specialise in defending directors and businesses against insolvency-related legal action across Victoria and Australia.
At Insolvit, we understand the complexities and challenges that businesses face during financial distress. Our dedicated network of professionals, including seasoned lawyers and insolvency practitioners, is committed to guiding you through the intricacies of insolvency, insolvency litigation, and restructuring. With a wealth of experience and a track record of successful outcomes, we provide bespoke solutions tailored to your unique situation.
Our approach is proactive and hands-on, ensuring that every aspect of your case is handled with the utmost care and expertise. Whether you’re navigating voluntary administration, liquidation, or restructuring, our team is equipped to offer strategic advice and practical assistance. We pride ourselves on our ability to deliver clear, concise, and effective strategies to protect your interests and maximize outcomes.
Insolvit’s legal experts are well-versed in the latest developments in law and legal frameworks, offering robust representation in insolvency litigation. We aim to resolve disputes efficiently, minimizing the impact on your operations and reputation. Our lawyers and network of insolvency practitioners work closely with you to assess your financial position, identify viable options, and implement a structured plan for recovery or orderly wind-down.
Choose Insolvit for a partner that stands by your side, providing clarity and confidence in times of uncertainty. Let us help you turn challenges into opportunities for a stronger, more resilient future. Contact us today to discuss how we can assist with your insolvency, litigation, and restructuring needs.
HAS YOUR COMPANY RECEIVED A WINDING UP APPLICATION? IT MIGHT NOT BE TOO LATE. WE CAN HELP.
Avoiding a winding up application in Australia requires strategic action. At Insolvit, our expert insolvency lawyers in Victoria can help you navigate this complex process. Addressing financial issues promptly is crucial, whether through negotiating with creditors or entering voluntary administration. If the debt is disputed, applying to set aside the statutory demand within 21 days is essential. Additionally, appointing a small business restructuring practitioner can pause the winding up application, providing time to develop a repayment plan and survive insolvency. Seeking professional legal advice early can significantly increase your chances of avoiding a winding up order. Trust Insolvit to provide the expertise you need to protect your business and secure a favourable outcome. Contact us today to learn more about our comprehensive insolvency law services.
Have you received a Director Penalty Notice from the AUstralian Taxation Office (ATO)? We can help.
What Makes Insolvit Different
We focus on director penalty notices, insolvency litigation and director defences. This focus means we understand the strategies liquidators use, how ATO enforcement works, and what defences or strategies actually succeed in court. Our experience comes from representing clients these matters across Melbourne and Victoria.
Our Core Areas of Practice
Director Penalty Notice Defence
The ATO has dramatically increased its enforcement against company directors. We help directors understand their options and implement strategies to protect personal assets when penalty notices arrive.
Insolvent Trading Claim Defence
When companies enter liquidation, directors often face personal liability claims. We defend against these actions using business judgment defences, safe harbour provisions, and expert evidence on company solvency.
Unfair Preference Claims
Liquidators regularly pursue creditors to recover payments made before liquidation. We represent both creditors facing these claims and directors who may face related liability.
ASIC Investigation Response
When ASIC investigates phoenix activity or director conduct, we provide strategic advice on responding to examination notices and protecting legal professional privilege.
Understanding Your Legal Position
The key to effective defence is understanding exactly what you're facing and when action is required. Different types of notices have different deadlines and defence options:
Director Penalty Notices - Traditional notices provide 21 days to respond, while lockdown notices create immediate personal liability. The type of notice you receive determines your available strategies.
Statutory Demands - Companies have exactly 21 days to respond to statutory demands. This deadline cannot be extended, making immediate legal advice essential.
Liquidator Claims - Whether facing insolvent trading claims or unfair preference recovery, early engagement allows us to develop stronger defence strategies.
Why Timing Matters
Insolvency law operates on strict timeframes. Delaying legal advice often means losing defence options that could have protected your position. We've seen too many directors contact us after critical deadlines have passed, significantly limiting their strategic choices.
Getting advice early doesn't commit you to expensive litigation. Often, understanding your legal position allows for better commercial negotiations and more favorable outcomes.
Our Practical Approach
We don't believe in creating false hope or unrealistic expectations. When we assess your matter, we'll explain what defences are genuinely available and what outcomes are realistic. Our role is to protect your interests using strategies that actually work in practice.
Some insolvency matters can be resolved through negotiation, others require court proceedings, and sometimes the best strategy is damage limitation. We'll help you understand which approach suits your specific circumstances.
Melbourne and Victoria Focus
Based in Melbourne's CBD legal precinct at Level 40, 140 William Street, we're familiar with the Federal Court and Supreme Court procedures that govern most insolvency proceedings. We also serve clients throughout regional Victoria through video consultations and coordinated representation.
Many of our clients are dealing with highly stressful situations involving their business and personal financial security. We understand this pressure and work to provide clear, practical guidance during these difficult times.
Recent Legal Developments
The insolvency landscape continues evolving, with new small business restructuring procedures providing additional options for eligible companies. Enhanced safe harbour protections also offer directors better protection when attempting legitimate business turnarounds.
However, ATO enforcement has simultaneously intensified, with record numbers of director penalty notices being issued. Understanding these changes and how they affect your specific situation requires specialized legal knowledge.
Getting Started
If you're facing insolvency-related legal action or investigation, the sooner you understand your position, the better your strategic options. We offer consultations to assess your matter and explain your available choices.
Contact our office to discuss your situation confidentially. We can often provide initial guidance over the phone and arrange urgent meetings when deadlines are tight
The ATO is seeking to enforce outstanding taxes owed by small business from company directors personally, and has dramatically increased its use of Director Penalty Notices.
Act now to protect your personal assets.
What Is a Director Penalty Notice?
A Director Penalty Notice is a formal notice issued by the ATO to company directors. It holds directors personally liable for their company’s unpaid tax and superannuation obligations. Specifically, directors become personally liable for the following amounts:
Pay as You Go Withholding (PAYGW)
Goods and Services Tax (GST)
Super Guarantee Charge (SGC)
Recent ATO Approach: Stricter Enforcement
The ATO has intensified its enforcement of DPNs, aiming to recover outstanding amounts from small business directors. Here are key points:
Increased Issuance: The ATO is now issuing more DPNs, targeting both current and former directors.
Personal Liability: Directors can face personal liability for unpaid amounts. This means their income may be garnished, or their tax credits offset to settle outstanding payments.
No Payment Arrangements: payment arrangements are not an effective to avoid personal liability. Directors must take decisive action.
Avoiding Personal Liability
Newly appointed directors have a 30-day window to avoid personal liability for pre-existing debts. Within this period, they can ensure the company does one of the following:
Pay in Full: Settle outstanding amounts.
Appoint an Administrator: Under specific sections of the Corporations Act 2001.
Small Business Restructuring: Appoint a practitioner under section 453B of the Corporations Act.
Liquidation: Initiate winding up proceedings. Seeking Legal Assistance
Navigating DPNs can be complex. Directors are encouraged to seek legal advice promptly to understand their rights and responsibilities.
Remember, compliance with tax and super obligations is crucial for directors, especially in light of the ATO’s proactive approach.
Contact us to discuss your matter
At Insolvit, we specialise in turning financial turmoil into a roadmap for recovery. As a prominent law firm based in Melbourne, we offer legal assistance in personal bankruptcy, corporate insolvency, and insolvency litigation. Our expert legal services are tailored to the unique challenges of our clients Melbourne and across Australia. Our experienced team is committed to delivering strategic solutions that protect your interests and guide you towards a stable financial future. With Insolvit, you can navigate the complexities of bankruptcy & insolvency with confidence, knowing you have a partner dedicated to your best interests.
Getting advice early will give you options, and help us to help you.
We are experienced lawyers in insolvency and restructuring. That means we can help you to understand the legal risks you face when you or your business are in financial difficulty. We know that dealing with bankruptcy and insolvency is stressful, and there can be a lot at stake. That is why we are passionate about working with businesses of all kinds to find ways to work around, turn around and overcome difficult financial situations.
Our experience is important because we have a deep understanding of your challenges. We understand, and are qualified to give you advice on how bankruptcy and insolvency laws operate, what strategies actually work and how these can effect your planning. We will work with you to produce a plan which is commercially and legally viable. We do not gamble with your business, or your future.
Frequently Asked Questions About
Bankruptcy in Australia
FAQs
In the face of financial hardship, understanding your options is crucial. Bankruptcy in Australia is a legal process that can offer relief from debts and a chance to start anew. We can guide you through the various bankruptcy options available, the process involved, and the alternatives to consider.
What is Bankruptcy?
Bankruptcy is a legal process where you’re declared unable to pay your debts. It can release you from most debts, provide relief, and allow you to make a fresh start.
You can enter voluntary bankruptcy by completing and submitting a Bankruptcy Form. Alternatively, a creditor can make you bankrupt through a court process known as a sequestration order.
Bankruptcy typically lasts for at least 3 years and 1 day
What are the consequences of bankruptcy?
Bankruptcy may impact your ability to get credit, travel overseas, or secure certain types of employment, including acting as a director of a company.
What are my obligations during bankruptcy?
You must provide details of your debts, income, and assets to your trustee.
Your trustee notifies creditors about your bankruptcy, preventing most creditors from contacting you regarding your debt.
Certain assets may be sold to help pay your debts.
If your income exceeds a set amount, you may need to make compulsory payments
How can I get help?
It’s essential to seek professional advice before deciding on bankruptcy. Financial counsellors can provide free, independent, and confidential help for simple or low debt matters, or you can contact our office if you have a more complex matter.
Liquidation
When a company is placed into liquidation, this generally occurs because the company is insolvent and because the company has no realistic chance of resolving its financial distress and becomes necessary to avoid additional financial and legal risks. This is usually because the financial situation of the business is dire and there is no prospect of restructuring or salvaging the business. A liquidation should be a last resort, and there are opportunities to avoid such a consequence. Sometimes, your creditors will have the power to liquidate your company.
Insolvent Trading
if your company incurs a new debt at a time where the company is insolvent, or where it is reasonable to suspect that your company is insolvent or could become insolvent because, you and other directors could be engaged in insolvent trading. Learn about what this means and how to avoid this.
Voluntary Administration
Sometimes, risks of insolvency and liquidation might be avoided early via a corporate restructure or voluntary administration. A corporate restructure can involve making changes to the legal and operational set up of your company. For example, this might include changes to ownership, management, leadership, shareholders, operations & policy, employee structures & roles, among other things. Voluntary administration involves the appointment of a voluntary administrator with the view to formally restructuring or selling the business.
Personal Bankruptcy
Sometimes, the way your business is structured, or, the contract you have signed for your business, might leave you personally vulnerable. this means that if your business is struggling, some creditors might look to you personally for payment which could expose your personal assets. Creditors might commence legal action against you personally if your business cannot afford to pay, or if it is liquidated. This might lead to a scenario where you are later exposed to bankruptcy proceedings. A bankruptcy proceeding means that a bankruptcy trustee might be appointed to take over your personal assets and sell them to pay off creditors. There are ways to avoid this scenario with early advice.
Understanding what things mean empowers you to make decisions. We help you make sense of the process, and the options.
Director Penalty Notices
When your company has failed to pay its taxation obligations, such as pay as you go withholding requirements (PAYG) or superannuation guarantee charge liabilities (SGC), the Australian Taxation Office (ATO) has the power to issue to directors of that company a Director Penalty Notice (DPN). A DPN will result in the directors of a company becoming personally and individually liable for any outstanding PAYG and SGC as well as any accumulated interest and penalties. All directors, including directors who have resigned, can receive a DPN notice and become personally liable.
There are two types of DPN notices: A Traditional Notice and a Lockdown Penalty Notice.
We have a rich understanding of what works, and, more importantly, what doesn’t
Not all advice in bankruptcy and insolvency is equal, and not all strategies are viable.
When your business or future is on the line, it can be hard to know who you can rely on for help. Cost also plays a part. We know that, sometimes, it can be hard to know who to trust. That is why we are open, clear and straight forward with you when it comes to what works, and what doesn’t work. There are no quick fixes to insolvency, regardless of what you might read elsewhere. Countless court cases attest to that. What you need is thoughtful and carefully evaluated advice that looks at the full picture.
Our experience is important because we have a deep understanding of your challenges. We know, and are qualified to give you advice on, how bankruptcy and insolvency laws operate, what strategies actually work and how these can effect your planning. We will work with you to produce a plan which is commercially and legally viable. We do not gamble with your business, or your future.
Contact us to discuss your matter
At Insolvit, we specialise in turning financial turmoil into a roadmap for recovery. As a prominent law firm based in Melbourne, we offer legal assistance in personal bankruptcy, corporate insolvency, and insolvency litigation. Our expert legal services are tailored to the unique challenges of our clients Melbourne and across Australia. Our experienced team is committed to delivering strategic solutions that protect your interests and guide you towards a stable financial future. With Insolvit, you can navigate the complexities of bankruptcy & insolvency with confidence, knowing you have a partner dedicated to your best interests.