There may be potential for making an arrangement with your creditors and the longer you operate, the more hostility you can expect in discussions with your creditors. In addition, continued trading may involve the commission of criminal offences. There are two mechanisms which can be used to avoid bankruptcy. Discuss these with a solicitor. Part X arrangement where creditors appoint a trustee to act on their behalf to sell assets, collect proceeds and pay dividends.
Companies There are a number of mechanisms which can be used to preserve the assets of the company.
Discuss each of the options listed with a solicitor. Provisional liquidation - a provisional liquidator can be appointed to preserve the company's assets until an application to wind up the company is heard. Official liquidation - proceedings are usually commenced by a creditor serving a notice under section 460 of the Corporations Law. Voluntary administation - the assets of the company can be protected from creditors for a period of 28 days during which an administrator will prepare a deed of arrangement. The creditor then accepts or rejects the deed.