Many businesses are struggling to operate and are “deferring debts”.
Experts are warning this practice of “deferring debts” may cause an increase in business liquidations over the next 12-18 months.
With COVID-19 severely impacting business revenue, many businesses may not have the funds to repay their debts when they are due.
What Is Insolvency?
Insolvency occurs when a business cannot pay their debts by the due date. The most common methods of dealing with insolvency in Australia are voluntary administration, liquidation and receivership.
The Current Situation
There have been many small-to-medium businesses that have closed due to COVID-19, with 126 business insolvencies in the March quarter. This time last year, the number of businesses made insolvent was 157.
Why are there not more businesses recorded as insolvent when COVID-19 has impacted so many small-to-medium businesses?
Experts believe the Federal Government measures have made it harder for businesses to be placed into liquidation.
How We Can Help
Ryan Murdoch O’Regan’s expert insolvency lawyers have assisted many individuals and businesses with their bankruptcy issues. This includes negotiating with creditors, preparing bankruptcy documentation and representation in bankruptcy proceedings.
Our team of lawyers are experts in their field and go above-and-beyond to deliver the best result, each and every time. We are proud to provide 5 star customer service to our clients.
As one of our clients said “Invest in the best – RMO“.
We are available to meet with you at any of our local offices (Brisbane, Gold Coast, Beenleigh, Cleveland and Jimboomba) or by telephone or video-conference.
Johnson, H, “‘Tsunami’ of bankruptcies, business collapses tipped”, The Courier Mail, 5 May 2020
This article is for your information and interest only. It is not intended to be comprehensive, and it does not constitute and must not be relied on as legal advice. You must seek specific advice tailored to your circumstances.