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Insolvency

Insolvency law plays an integral part in the financial and legal landscape. Our accomplished solicitors can help you navigate legal rules and regulations for an orderly and fair procedure to handle insolvent affairs.

Liquidation
For liquidation, business assets are sold to pay bills and the remaining assets are divided amongst shareholders, partners and other investors. Insolvency of the business is not necessary to liquidate assets.

Bankruptcy
Bankruptcy is the legal status of an entity – whether individual or corporate – that cannot repay outstanding debts to its creditors. It is often imposed by a court order after the debtor files a petition. A reliable bankruptcy lawyer can help you in this situation.

Administration
Administration is a process of gaining control of an insolvent company, in which the Court may appoint a licenced insolvency practitioner as an administrator whose aim is to leverage the company’s assets to repay the creditors as quickly as possible and in full.

Preferences
Preferential debt payments are debt payments made to a creditor in the 90-day period before a debtor files for bankruptcy. A preferential creditor is one that has legal preferential right to receive payment upon the debtor’s bankruptcy under applicable insolvency laws.

Uncommercial Transactions
An uncommercial transaction arises when a company enters into a transaction where in a vigilant individual in the company’s would not usually enter into when the company is insolvent or is becoming insolvent as a result of entering that transaction.

Termination
A termination right is a right to terminate a contract where the other party is suffering from insolvency, regardless of whether the counterparty is otherwise in full compliance of the contract.

Deeds of a Company Agreement
This is a binding agreement between a company and its creditors governing how the company’s affairs will be dealt with.

Examinations
As a debtor, there will be a compulsory examination where the debtor’s conduct, dealings and property will be appraised.

Winding Up
Winding up comes to pass when laws or court orders force an insolvent company to appoint a liquidator who sells assets and distributes the proceeds to the creditor.

Reinstatement
This is the restoration of the debt under its original terms.

Part IX
This is an agreement between a debtor and his or her creditors in which the debtor and creditors agree that the debtor will pay a percentage of the debt over a period of time. This is for a maximum of debts of around $75,000 which changes every six months slightly. In order to qualify you cannot have had a previous debt agreement or have declared bankruptcy in the last 10 years.

Part X
Similarly to Part IX it is an arrangement between a debtor and his or her creditors, though it is more complex and allows for larger debts and larger incomes.

Litigation
Mercantile Legal solicitors will carefully explain every step of the litigation process, from preparations to the actual court proceedings and what comes after, in order to secure your financial future.

Extradition
This is the act of one jurisdiction to deliver a person accused of or has been convicted of committing a crime in another jurisdiction into the custody of a law enforcement agency of that other jurisdiction.

Creditors
Creditors are persons or entities to whom money is legally owed.

Directors
Directors, though not personally liable for a company’s debts, owe a duty to the company, and in the threat of insolvency, to the company’s creditors.

Creditor Meetings
A meeting of creditors is called upon a company’s insolvency to explain why the company has failed and what steps should be taken.

Offences
Offences are acts that are harmful to an individual, the community, or the state. Such acts are forbidden and punishable by law.

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