Insolvency & Bankruptcy Lawyers Brisbane | Director & Creditor Advice

• Unmanageable debt: Struggling to make minimum payments on most or all of your debts.
• Mounting interest: Debt snowballing due to accruing interest, making repayment impossible.
• Legal action: Creditors threatening legal action like wage garnishment or repossession.
• Struggling with living expenses: Difficulty covering basic needs like food and housing due to debt.
• Anxiety and stress: Debt is causing significant emotional distress and affecting your well-being.

Yes, recovery from insolvency is possible through debt restructuring, entering into a debt agreement, or a personal insolvency agreement.

Yes, personal insolvencies are fairly common. Personal insolvencies increased by 17% for the June quarter ‘23, compared to the previous year.

There were 2,705 new personal insolvencies in the 3-month period to June 2023.

Generally, bankruptcy lasts for three years, but it can be extended. Other insolvency procedures like debt agreements or personal insolvency agreements have varied timelines, depending on the terms agreed upon with creditors.

Personal insolvency, often called bankruptcy, affects individuals and sole traders, triggered by personal factors like job loss. It involves simpler legal procedures like asset liquidation and debt discharge, impacting mainly the individual's credit score and employment.

On the other hand, business insolvency is more complex, with options like liquidation or administration to maximise creditor recovery. It can impact a wider range of stakeholders, including shareholders, employees, and clients, potentially leading to business closure and job losses. Seeking professional advice from an insolvency lawyer or solicitor is crucial for navigating these distinct paths of financial distress.

The criteria for bankruptcy vary depending on your location and the specific laws governing personal insolvency. However, some common factors include:

• Having significant unpaid debts exceeding your income and assets
• Having made unsuccessful attempts to repay creditors
• Being unable to meet your essential living expenses.

The cost of hiring a bankruptcy lawyer in Brisbane, including at Macmillan Lawyers and Advisors, can vary based on several factors. Different law firms may have different fee structures, and the complexity of your case can also influence the overall cost. While our consultations are free, we work on an hourly rate thereafter.

In Australia, a bad credit listing generally stays on your credit report for five years. Serious credit infringements, such as bankruptcy, can remain on the report for up to seven years.

In Australia, the statute of limitations for chasing a debt is generally six years from the date when the debt became due and payable. However, this period can reset if you make a payment or acknowledge the debt in writing.

The disadvantages of insolvency include damage to your credit rating, loss of assets, and potential restrictions on future borrowing or business operations. Additionally, it can have emotional impacts due to the stress and stigma associated with insolvency.

According to AFSA, a significant number of individuals commit offences during bankruptcy. In the recent financial year, 91 persons were prosecuted for a total of 174 charges related to bankruptcy regulations. The three most common types of bankruptcy offences in Australia were:

1. Disposing of or creating a charge on any property during bankruptcy with the intent to defraud creditors (Section 266(1)), with 35 charges.
2. Within 12 months before bankruptcy, disposing of or creating a charge on any property with intent to defraud creditors (Section 266(3)), with 24 charges.
3. Failing to comply with a Notice (Section 267B(1)), with 26 charges.

It's essential to discuss the complexities of bankruptcy with a knowledgeable bankruptcy lawyer to avoid these and other potential legal infractions.

If your company is insolvent — meaning it cannot pay its debts as and when they fall due — the directors must take immediate action. Continuing to trade while insolvent exposes directors to personal liability. Options include voluntary administration, a Deed of Company Arrangement (DOCA), creditors' voluntary liquidation, or a formal restructuring. Macmillan Lawyers can advise you on which option best protects your position and the interests of creditors.

Generally, directors of companies are not personally liable for company debts due to the separate legal entity principle. However, directors can become personally liable in certain circumstances: insolvent trading (continuing to incur debts when the company is insolvent), Director Penalty Notices (DPN) for unpaid PAYG withholding and superannuation, personal guarantees given to creditors, and breach of directors' duties. Taking early legal advice is the best way to protect yourself.

Safe harbour is a statutory protection under section 588GA of the Corporations Act 2001 that shields directors from personal liability for insolvent trading, provided they are taking a course of action that is reasonably likely to lead to a better outcome for the company than immediate administration or liquidation. It applies to directors who identify financial distress early, seek appropriate advice, and document a genuine restructuring plan. Macmillan Lawyers can assess whether safe harbour applies to your circumstances.

If you receive a statutory demand, you have 21 days to either pay the debt in full or apply to the court to have the demand set aside. This 21-day deadline is strict — courts cannot extend it. Grounds for setting aside a statutory demand include a genuine dispute about the debt, an offsetting claim, or a defect in the demand causing substantial injustice. Do not ignore a statutory demand. Contact Macmillan Lawyers immediately — acting in the first few days gives you the best chance of protecting your company.

Voluntary administration is a formal insolvency process where an independent administrator takes control of an insolvent company to investigate its affairs and explore options for its future. The administration period typically lasts around 25 business days, ending with a creditors' meeting where creditors vote to approve a Deed of Company Arrangement (DOCA), place the company into liquidation, or return control to the directors. Voluntary administration gives directors breathing space to restructure while protecting against personal liability for insolvent trading during the process.