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Insolvency or near insolvency both personal and corporate

Insolvency or near insolvency both personal and corporate

Insolvency, put simply, is when a company or person cannot pay debts when they fall due. In the case of a person, this typically results in bankruptcy. The bankruptcy process can be brought on voluntarily by the person unable to pay their debts, known as a “debtor’s petition”, and also by a creditor, known as a “creditor’s petition”.

In terms of companies, if a company owes you money and the debt is a simple contractual debt that is unlikely to be contested, there is the option of serving what’s known as a Statutory Demand. If the debtor company does not pay the amount demanded or apply to set aside the Statutory Demand within 21 days, the company will be deemed insolvent and the creditor can commence the process of winding up the company premised on that deemed insolvency event.

The area of the law relating to insolvency is complex and there are strict time limits within which to act. Our lawyers can help you to resolve situations concerning solvency at any stage of the process. However, it is always best to speak with us as early on as possible to enable us to provide you with the best assistance, strategy and advice which will help you to achieve your objectives in a commercially sensible way.

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