It can be daunting to consider debt problems and their potential solutions. To help you understand the processes involved, here’s an easy-to-understand explanation:
Insolvency: This is where a company can’t repay debts. Unless the business repays the capital owed, this can lead to an insolvency practitioner (IP) being appointed to liquidate the business. This is why it is important to act fast, seek help, and receive support to avoid this outcome.
Voluntary administration: A business may appoint an independent administrator to oversee business proceedings. This can maximise the potential for financial recovery, as this new set of eyes may find the faults in your operation and present actionable solutions. In the right circumstances, it’s a proven way to recover from insolvency.
Liquidation: Involves selling assets to pay creditors and shareholders. The company must be closed to do this. A liquidator will be appointed to help with this process, who can direct proceedings to ensure debts are paid. Although a drastic step, this is neither good nor bad—it’s an essential legal step to clear outstanding debt.
Contact us for support on these core debt solutions. We provide judgment-free assessments and you don’t have to pay for your first consultation: 1800 621 308.