Insolvent trading occurs when directors allow a company to incur debts when it is already insolvent. This can lead to personal liability for those debts.

Generally, directors are not personally liable. However, they may be held accountable for insolvent trading, breaches of duty, or personal guarantees.

The liquidator investigates the company’s affairs, recovers assets, pays creditors, and ensures a fair and legal winding-up process.

Liquidation can be initiated by the company’s directors, shareholders, or by a court order following a winding up application by a creditor.

When a company is insolvent and cannot pay its debts, or continuing operations will worsen the situation, directors may opt for liquidation to protect stakeholders' interests. It is imperative to take proactive steps and obtain advice promptly.

Voluntary administration is a process where an external administrator takes control of a financially troubled company to assess its viability and propose a plan to save the business or maximise returns to creditors.

The main types are:

• Creditors' Voluntary Liquidation (CVL): Initiated by insolvent companies.

• Court-Ordered Liquidation: Ordered by the court following an application from a creditor.

• Members' Voluntary Liquidation (MVL): For solvent companies that choose to close operations.

Odyssey Legal provides expert legal advice on bankruptcy and insolvency issues, helping clients explore alternatives, understand their rights and obligations, and navigate the legal processes involved.

Yes, if you owe $10,000 or more, a creditor can apply to the Court to make you bankrupt. This process involves serving a bankruptcy notice and, if unresolved, filing a creditor's petition with the Court.

The process involves submitting a Bankruptcy Form to the Australian Financial Security Authority (AFSA). Once accepted, a trustee is appointed to manage your bankruptcy.

Some professions have restrictions for bankrupt individuals. It's essential to check with your industry regulator or professional association to understand any implications.

Traveling overseas during bankruptcy requires written permission from your trustee. Unauthorised travel can lead to penalties or an extension of the bankruptcy period.

Certain assets are protected, including household items, tools of trade up to a specific value, and a vehicle up to a certain value. However, assets like real estate or investments may be sold to repay creditors.

Bankruptcy typically lasts for three years and one day from the date your bankruptcy is accepted. However, it can be extended in certain circumstances, such as non-compliance with obligations.

A debt agreement is a formal arrangement between you and your creditors to repay a percentage of your debts over time. It's a legally binding agreement that can provide relief from unmanageable debts.

Yes, alternatives include debt agreements, personal insolvency agreements, or informal arrangements with creditors. These options can help manage debts without the severe implications of bankruptcy

Declaring bankruptcy can impact your credit rating, restrict your ability to obtain credit, and may result in the loss of assets. It also imposes certain obligations, such as informing your trustee of changes in your financial circumstances.

You may be insolvent if you can't pay your debts when they're due, your liabilities exceed your assets, or you're unable to obtain financing to meet your obligations. It's crucial to assess your financial situation and seek professional advice if you suspect insolvency.

Bankruptcy refers to a legal process where an individual is declared unable to pay their debts, while insolvency is a broader term indicating a person's or company's inability to meet financial obligations as they come due. Insolvency can lead to bankruptcy for individuals or liquidation for companies.