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Understanding Insolvency
For companies, insolvency is defined in section 95A of the Corporations Act 2001 (Cth) as the inability to pay debts as and when they fall due.
Corporate insolvency may result in:
- Statutory demands
- Winding up applications
- Appointment of administrators or liquidators
- Director liability for insolvent trading
A creditor owed a debt above the statutory threshold may issue a statutory demand. If the company does not comply within 21 days, insolvency is presumed and winding up proceedings may be commenced in the Supreme Court.
For individuals, insolvency may lead to bankruptcy proceedings under the Bankruptcy Act 1966 (Cth). A creditor may issue a bankruptcy notice and, if non-compliance continues, file a creditor’s petition in the Federal Court or Federal Circuit and Family Court.
Strict statutory time limits apply in both corporate and personal insolvency matters.
When You Need an Insolvency Lawyer
Legal advice is essential when:
- Your company cannot meet its debts
- You have received a statutory demand
- You are facing a winding up application
- You have been served with a bankruptcy notice
- You are considering commencing insolvency proceedings
- There are concerns about director liability
- Creditors are threatening formal enforcement
Time limits, particularly the 21 day period for statutory demands and bankruptcy notices, are strictly enforced.
Our Legal Services in Insolvency Matters
We advise companies, directors, creditors and individuals, including:
- Insolvency risk assessment
- Statutory demand advice
- Applications to set aside statutory demands
- Winding up proceedings
- Bankruptcy notice advice
- Creditor’s petitions
- Director duty and insolvent trading advice
We provide clear advice on statutory compliance and enforcement strategy.
Our Approach to Insolvency
We assess financial position, available assets and immediate legal risk. Procedural compliance and statutory deadlines are prioritised from the outset.
For companies, we examine whether grounds exist to challenge a statutory demand, including genuine dispute or offsetting claim.
For individuals, we assess options in response to a bankruptcy notice and evaluate exposure before creditor’s petition proceedings commence.
Where acting for creditors, we ensure strict compliance with statutory requirements before initiating winding up or bankruptcy proceedings.
Our advice is time-sensitive, structured and commercially grounded.
Why Choose Maguire & McInerney
Maguire & McInerney advises businesses, directors and individuals on insolvency and bankruptcy matters involving significant financial exposure and strict statutory obligations. Our work is grounded in detailed knowledge of the Corporations Act 2001 (Cth), the Bankruptcy Act 1966 (Cth) and court procedure. We provide clear advice on risk, enforcement options and director duties, supported by transparent fee structures.
If you are facing insolvency risk or have received a statutory demand or bankruptcy notice, contact us and obtain advice immediately to ensure compliance with statutory time limits.
Steps To Get Started
FAQs
Directors may face personal liability for insolvent trading or where personal guarantees have been provided.
An application to set aside a statutory demand must generally be filed within 21 days of service.
For companies, creditors may issue statutory demands or seek winding up orders. For individuals, creditors may issue bankruptcy notices and commence court proceedings.
A bankruptcy notice is a formal demand requiring payment of a judgment debt within a prescribed period, failing which a creditor may seek a sequestration order.
A company is insolvent if it cannot pay its debts as and when they fall due, as defined in section 95A of the Corporations Act 2001 (Cth).
What Our Clients Say
