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Restructuring and insolvency law in Perth, Australia, refers to the legal processes and regulations involved when individuals or businesses face financial distress, are unable to meet their debt obligations, or need to reorganise their financial affairs. These laws provide structured procedures for dealing with insolvency, allowing for either a formal resolution such as administration, liquidation, or bankruptcy, or informal arrangements with creditors. Perth, being the economic hub of Western Australia, sees restructuring and insolvency matters frequently due to the city’s active business landscape. Understanding the frameworks and protections these laws offer is crucial for anyone facing financial difficulty.
Seeking legal assistance for restructuring and insolvency matters is often essential because of the complexity and high stakes involved. Common situations where a lawyer’s help is beneficial include:
Lawyers who specialise in this area can provide advice on legal risks, draft documents, represent you in negotiations or court proceedings, and help secure the best possible outcome during stressful financial events.
Restructuring and insolvency in Perth are primarily governed by federal legislation, but there are local considerations for Western Australia-based individuals and businesses.
Some processes, such as applications for winding up or bankruptcy hearings, may need to be initiated or defended in the Western Australian courts. Local court procedures, property laws, and business practices can also have an impact on the restructuring or insolvency process.
Restructuring is the process of reorganising a company’s financial affairs to keep the business viable and avoid insolvency. Insolvency occurs when an individual or business cannot pay debts as they fall due.
Voluntary administration is a process where an insolvent company appoints an external administrator to assess options for the company’s future, which may include restructuring, winding up, or returning control to directors.
In liquidation, a company’s assets are sold off to pay creditors. The business ceases operations, employees are terminated, and after the assets are distributed, the company is deregistered.
Generally, directors are protected from personal liability, but there are exceptions such as trading while insolvent, unpaid employee entitlements, and certain tax debts.
Yes, alternatives to bankruptcy include negotiating informal payment arrangements, entering a debt agreement, or proposing a personal insolvency agreement under the Bankruptcy Act.
Creditors have rights to lodge proofs of debt, participate in creditors’ meetings, and may receive distributions if there are available funds from the insolvent estate or liquidation.
Bankruptcy typically lasts three years and one day from the date it is accepted but can be extended in some circumstances due to conduct or non-disclosure.
Employees may have claims for unpaid wages, leave, and entitlements. The Fair Entitlements Guarantee (FEG) may provide assistance if the employer cannot pay.
Trading may continue during voluntary administration or receivership if it benefits creditors. In liquidation, trading generally ceases unless necessary for asset sales.
You must act quickly. If you cannot pay or dispute the debt, seek legal advice immediately. Ignoring a statutory demand can result in a winding up application against your company.
If you need further information or support, the following organisations and bodies can be helpful:
If you are facing financial difficulties or are concerned about insolvency, taking prompt and informed action is crucial. Here are the recommended next steps:
Taking early action not only increases your options for recovery and protection but also helps ensure compliance with your legal obligations. A qualified legal advisor will provide tailored guidance that best suits your circumstances and helps you navigate through financial distress with confidence.
