Did you know that at the end of 2015 the Australian Financial Security Authority reported that Toowoomba had the highest level of personal insolvency in Queensland for 2013/2014?

The test for solvency in Australia is whether a person or entity is able to pay all of their debts as and when they become due and payable.

A number of other presumptions of insolvency can also arise under the Corporations and Bankruptcy Acts, the most common of which include the failure of an individual to satisfy a bankruptcy notice or the failure of a company to pay a statutory demand.

If a person or entity is insolvent then they are liable to bankruptcy (in the case of an individual) or winding up (in the case of a company).

Whilst bankruptcy, for example, is not meant to be punitive and is about “financial rehabilitation” it can have devastating consequences on a person’s personal & professional standing and credit history.

Thomas routinely gives advice to individuals, company directors, and creditors on a range of insolvency issues including the prospects of success or otherwise of unfair preference claims and Deeds of Company Arrangements, bringing or resisting insolvency Court action, and Part IX arrangements under the Bankruptcy Act.

Thomas has also acted in a broad range of insolvency disputes, including:

  1. Settling and serving bankruptcy notices and statutory demands;
  2. Bringing or responding to applications for sequestration orders in the Federal Circuit Court, and for winding up orders in the Queensland Supreme Court; and
  3. Unfair preference and voidable transaction claims, and claims with respect to insolvent trading.

If you have been served with a statutory demand or bankruptcy notice it is important that you act quickly. This is because very important time limits attach to these documents which, if overlooked, can give rise to a presumption of insolvency against you or your company.