UNDERSTANDING INSOLVENCY AND THE OPTIONS
ARE SOME OF THESE ISSUES CAUSING YOU SLEEPLESS NIGHTS?
Do you have the ATO or Suppliers threatening you with winding up petitions?
Are you experiencing poor cash flow or continuing losses?
Do you have difficulty obtaining finance?
Has your business enough liquid assets to satisfy unpaid creditors?
Do you need assistance to deal with ATO debt?
Are you a company director with concerns about insolvent trading or personal guarantees?
WHAT IS INSOLVENCY?
You are insolvent if you cannot pay debts when they become due – (either now or, because of some contingent liability of the business, in the future) or if your assets are worth less than your total liabilities. The first is sometimes called ‘cash flow insolvency’ and the second ‘balance sheet insolvency’.
Having a profitable business is not, in itself, a guarantee that you will not be insolvent. cash flow problems — for example, if customers fail to pay money they owe you, or if you over-invest in equipment — that mean you cannot pay your debts as they fall due could mean you are insolvent, even though the business is healthy otherwise.
The consequences of failing to take the proper steps once your business becomes insolvent can be dire and could affect you personally whether you are a sole trader or a director of a company. It is essential that proper advice is taken from a professional specialising in insolvency, at as early a stage as possible, to ensure that you minimise personal exposure. Blindly trading on in the hope that you will be able to turn the business round may prove very costly to you personally if it does not work and you actually might even make the position worse.
There are several debt solutions available if you are insolvent. These are legally binding, so they give you protection from your creditors and write off some or all of your debts.
Each insolvency solution is different, and as such, each has its unique qualifying criteria. In most cases, insolvency solutions are only suitable if your debts add up to more than the value of the assets you own.
There are many reasons when it becomes necessary for a business to cease trading or re-structure. Often a large, bad debt, loss of key customers or fundamental cash flow problems necessitate action.
Cash flow at crucial times is the key to any business. Many viable companies that go into insolvency could have been saved, given access to appropriate advice and funding lines.
CONTACT BUSINESS SOLVE TODAY AND LET US EXPLORE THE OPTIONS FOR YOU AND YOUR BUSINESS TO GET BACK INTO PROFIT