What is insolvency?

What is insolvency? Put simply, insolvency is the state of being insolvent or unable to pay your debts as and when they are due and payable. If you’re facing it, it’s a daunting reality.

Determining insolvency isn’t always easy. A forward-looking cash flow review can help you determine your company’s ability to pay its debts when they become payable. However, you also need to look at your wider financial position.

Common signs of insolvency include:

• Continued losses over recurring financial reporting periods
• Inability to borrow money or obtain loan approvals
• Overdue taxes
• Poor liquidity ratios
• Inability to produce timely and accurate information on your company’s performance and financial position

Want to see if your business could be insolvent? See our more detailed insolvency checklist.

What does insolvency assistance involve?

We can guide you through your options and next steps. We are qualified ASIC and ARITA registered experts with experience in handling all aspects of insolvency. You can be referred to us by your accountant or you can self-refer.

As part of the insolvency appointment, we’ll assess which services are appropriate tools for your business. The recommendations we make and solutions we deliver are always highly-tailored to your individual circumstances.

Specialist insolvency services

As part of an insolvency appointment, we assess which of the following services are appropriate tools for your business.  

>>Voluntary administration
Voluntary administration can give your company some breathing space while its financial issues are worked through. It usually involves restructuring the business and compromising with creditors.

>> Deed of Company Arrangement (DOCA)
Are you in the process of voluntary administration? If so, drawing up a DOCA which outlines how you intend to repay your creditors can help you come to an agreement and provide the financial to turn things around and return to solvency.

>> Liquidation
If your business at the end of the line? Winding things up can be the best and only option in some cases, and we can help you through the process. While it may not be the ideal end result, it can bring things to a clean resolution.