Auckland Insolvency Lawyer – Advice And Help When The Debts Are Too Big
Auckland Insolvency Lawyer – Expert Advice for Financial Troubles
There are always people who struggle with their ability to pay their bills, but in difficult economic times, the numbers rise. This is when an Auckland insolvency lawyer comes into play. Given the complexity and range of the legal and tax issues around the topic, it is a good idea to talk to an Auckland insolvency lawyer as soon as possible.
What Is Insolvency?
Firstly, let’s look at the issue of insolvency. What is it?
Insolvency is in simple terms when a person or organisation is not able to pay their debts. An organisation can be a company, a not-for-profit entity, even a council such as Birmingham Council in the UK. In simple accounting, insolvency can be when the entity’s liabilities are greater than its assets.
In other situations, a company may be profitable, but it does not have enough cash to pay its debts.
Why Does Insolvency Happen?
There are many reasons why insolvency occurs, but common ones include:
- poor cash management
- a lack of financial planning
- a major unexpected expense such as a legal judgement against the company
- a change in market conditions
- outdated products
- economic slowdowns.
The last situation is clearly a likely cause in the current economic climate.
What Are The Effects Of Insolvency?
Being insolvent can affect both private individuals and companies.
For an individual, the ultimate effect is personal bankruptcy. This means that your debts are expunged to a large degree. Some people might feel that is a good option, however, this choice needs a lot of consideration because it affects your credit rating. A person will remain in bankruptcy for three years but generally, people will not be able to get a loan for up to seven years. You also have to transfer your assets to the Official Assignee. There are other options to manage your debts which you can find at their website.
For a company, the end result is often liquidation of the business. This means that the assets of the enterprise will be sold to pay off its debts. This generally means that suppliers and creditors may not receive the full amount owed to them. Another major consequence may be job losses unless the business can be bought, and the staff retained.
Auckland Insolvency Lawyer – Getting Help From Them
As we have seen, insolvency can have severe effects, both short- and longer-term. Given these implications, it is essential to get professional advice before your situation becomes too difficult. If you do not take action, you may not have any choice over the situation as a creditor might take the action for you.
Sticking your head in the sand will not make the problems go away. Talk to an Auckland insolvency lawyer as soon as you see your financial situation deteriorating.
They will give you advice on the options you can take, whether as an individual or if you represent a company. They will explain the outcomes of different approaches, and the possible effects on your life, both immediately, and for the longer-term.
Summary
A law firm in the CBD with experienced business insolvency lawyers in Auckland is McVeagh Fleming. They can help. Click the link for more details.