Insolvency Lawyers Melbourne
Insolvit helps company directors, business owners, creditors and individuals respond to urgent insolvency-related legal issues, including Director Penalty Notices, statutory demands, winding up applications, insolvent trading claims, unfair preference claims, bankruptcy and shareholder disputes.
Facing ATO or Creditor Action? Act Fast
Director Penalty Notices, statutory demands, winding up applications and bankruptcy notices all run on strict deadlines, usually 21 days, sometimes less. The earlier you get advice, the more options you have.
How Insolvit Can Help You
We focus on insolvency-related disputes, defences and litigation. That focus means we know the strategies liquidators use, how the ATO actually enforces, and which defences hold up in court.
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The ATO has dramatically increased its use of DPNs against directors for unpaid PAYG, GST and superannuation. The type of notice you've received, traditional or lockdown, dictates what action is still available.
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A statutory demand puts your company under a 21-day clock. We move quickly to dispute the debt, negotiate with the creditor, or file a setting-aside application before the deadline expires.
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If your company has been served with a winding-up application, it may not be too late. Depending on the circumstances, we may be able to challenge the application, negotiate with the applicant creditor, or appoint a small business restructuring practitioner or voluntary administrator to pause proceedings and salvage your company.
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When a company goes into liquidation, directors risk being held personally liable for debts the business took on while it was struggling. To successfully sue you for insolvent trading, a liquidator must prove you were a director at the time, the company was already insolvent (or became insolvent by taking on the debt), there were clear signs of financial distress, and you or a reasonable person in your position should have noticed those signs.
How to Defend a Claim.
Fortunately, the law provides strong defences to protect your personal assets. We can help you defend a claim if you had genuine reasons to believe the company was solvent, or if you relied on financial advice from a trusted professional. You may also be protected if illness kept you out of management, if you actively tried to stop the debt from being incurred, or if you qualified for Safe Harbour protections. We act quickly to assess your exposure and build the strongest possible defence against the liquidator.
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Liquidators routinely pursue creditors to recover payments made before liquidation. We act for creditors defending these claims and for directors facing related liability.
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Bankruptcy can offer relief from debts and a fresh start, but the consequences are significant, including restrictions on credit, travel and acting as a company director. We help individuals understand their options, including alternatives to bankruptcy, and respond to bankruptcy notices and creditors' petitions.
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Disputes between shareholders or directors can quickly threaten the future of a business. We act in oppression claims, buyout disputes, and applications to wind up companies on just and equitable grounds.
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A liquidator or administrator can apply to the court to summon you to be examined under oath about a failed company’s affairs. This is a highly serious process used to gather evidence before launching expensive recovery proceedings against you. You can be legally compelled to answer questions and produce internal documents, and any evidence you give can be used against you in later court actions. We provide critical pre-examination advice, including to determine the merits of contesting the basis of the summons and robust courtroom representation to protect your rights throughout the hearing.
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When a company fails, liquidators aggressively target any funds a director drew from the business that were recorded as a loan account, demanding immediate personal repayment. They can also challenge and claw back "unreasonable director-related transactions", such as asset transfers or payments that benefited you or your close associates. We advise directors on their personal exposure and defend them against these highly stressful liquidator clawback claims.
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Whether the right outcome is winding up, voluntary administration, or small business restructuring, we advise directors on the process, their obligations and how to manage personal risk through and after the appointment.
Why Choose Insolvit as Your Insolvency Lawyers
Specialist Focus
We don't try to be everything to everyone. Insolvency litigation, director defences and DPNs are what we do every day.
Straight Advice
We don’t sell false hope. We’ll tell you which defences are genuinely available, what outcomes are realistic, and when the right strategy is damage limitation rather than litigation.
Fast Response
Most of our matters arrive with a deadline attached. We move quickly to assess your position and arrange urgent meetings where the timing demands it.
Melbourne-based, Victoria-wide
Insolvit is based in Melbourne’s CBD legal precinct at Level 40, 140 William Street. We regularly appear in the Federal Court of Australia and the Supreme Court of Victoria and work with clients across regional Victoria through video consultation and coordinated representation.
Many of our clients are dealing with stressful situations that affect both their business and their personal financial security. Our role is to provide clear, practical guidance through that pressure.
Frequently Asked Questions About Insolvency Law in Australia
We focus on insolvency-related disputes, defences and litigation. That focus means we know the strategies liquidators use, how the ATO actually enforces, and which defences hold up in court.
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A Director Penalty Notice (DPN) is issued by the ATO and makes company directors personally liable for unpaid PAYG withholding, GST and superannuation guarantee obligations.
The ATO issues these in two distinct categories. A traditional notice gives you a strict 21-day window to take specific action before you become personally responsible for the debt. A lockdown notice, however, applies when tax lodgements are significantly overdue, creating immediate personal liability with absolutely no grace period.
If you have received a DNP, you must seek legal or specialist insolvency advice immediately.
Your next steps, whether that involves paying the debt in full, appointing an administrator, or entering small business restructuring, depend entirely on which type of notice you are holding and the exact date it was issued.
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A statutory demand is a formal written demand from a creditor for a debt of $4,000 or more. Your company has exactly 21 days to respond. If the demand is not paid, set aside or otherwise dealt with within that window, the creditor can apply to wind up your company. This deadline cannot be extended, which is why urgent legal advice matters. If the underlying debt is genuinely disputed, an application to set aside the demand can be filed in the Federal Court or Supreme Court.
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Bankruptcy in Australia typically lasts three years and one day from the date you file a statement of affairs. During that period, your income, assets and financial affairs are managed by a trustee. Certain assets may be sold to pay creditors. After bankruptcy ends, most debts are discharged, though some obligations, including child support, court-ordered fines and HECS debts, survive. The fact of your bankruptcy remains on the National Personal Insolvency Index permanently and on your credit file for up to five years.
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Insolvent trading occurs when a company incurs a new debt at a time when it is insolvent, or when reasonable grounds exist to suspect insolvency. Under the Corporations Act, directors can be held personally liable for those debts. When a company enters liquidation, the liquidator is required to investigate whether insolvent trading occurred and may commence proceedings to recover compensation for creditors. Defences are available, including the safe harbour defence and the business judgment rule, but they require careful preparation and, in many cases, contemporaneous documentation.
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Voluntary administration is a process where an independent administrator is appointed to take control of a company and assess its future. The aim is usually to produce a deed of company arrangement that allows the business to survive in some form, either through restructuring or a sale. Liquidation, by contrast, is a process of winding the company up, realising its assets and distributing the proceeds to creditors. Voluntary administration is generally pursued when there is still a viable business to save; liquidation is the outcome when there is not.
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An unfair preference is a payment made by an insolvent company to a creditor in the six months before liquidation that leaves that creditor better off than they would be in the liquidation itself. Liquidators are required to investigate and, where possible, recover these payments. Creditors who received payments in this period, including landlords, suppliers and financiers, can face claims to return those funds. Defences are available, including the good faith defence, but they depend heavily on what the creditor knew at the time of payment.
Speak With an Expert Insolvency Lawyer Today
If you're facing insolvency-related legal action, the sooner you understand your position, the more options you have. Getting advice early doesn't commit you to anything; often, it just leads to a better outcome for you.
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.