Before you learn about how insolvency lawyers can help you, it’s important to first explain some key concepts about insolvency law. What exactly is insolvency law, anyway? It’s the legal knowledge and obligations associated with the situation when a company cannot pay its debts. Whether a company is insolvent or not is decided through judicial application of the cash-flow test. Now that you know what the term refers to, you can move onto learning about how insolvency lawyers can help you. Read on to find out exactly how the unique knowledge and experience of insolvency lawyers can be of assistance.
Technical knowledge of the Corporations Act
Your insolvency lawyers will have specific knowledge that you don’t have, including an in-depth and technical understanding of the Corporations Act. This is the solvency law relevant in Australia. It is essential that you find insolvency lawyers to help you because they can provide quick thinking solutions in heated and multifaceted situations. In addition, your insolvency lawyers will also have a thorough knowledge of the Personal Properties Securities Act. With all this detailed understanding, your insolvency lawyers will be well equipped to guide you through the process.
Industry experience is crucial for appreciating how the insolvency industry works in practice. When looking for insolvency lawyers, aim to hire a firm that has at least 10 years of industry experience. The laws in the Corporations Act may seem clear and obvious, but they’re not all as enforceable as they may at first seem. Experienced insolvency lawyers will be able to tell you what’s worth fighting for and what your priorities should be.
Deal With Creditors
When creditors are on your back, it can be a stressful time. Insolvency lawyers can advise you on dealing with assets when your debts can’t be paid completely. Your insolvency lawyers will work out what the best option is for you, their client. Unlike accountants who deal with all the hard numbers, insolvency lawyers act as intermediaries in a situation, helping to resolve it to your benefit and potentially getting you out of a sticky situation.
Turn Things Around
While most cases of insolvency are resolved via voluntary administration or liquidation, there is one other option: transformation. This is when the directors get ready for some hard work and they put in the hard yards to turn around the fate of their company. If a turnaround is a priority for you as a director, then it’s important you find insolvency lawyers who are prepared to help you conduct a full transformation of your current business.
If you’re wondering how insolvency lawyers can help you, there are a myriad of ways. Firstly, their technical knowledge of the Corporations Act is a vital ally to you in your situation. Their industry experience also gives them a working understanding of the insolvency arena that will be a great asset. They can additionally help you deal with creditors and tell you want to do if you don’t have enough money to pay them, and lastly, insolvency lawyers can help you turn things around if that’s your aim.