If you are struggling with debt, you may be considering declaring insolvency. This is a big decision, and it’s important that you know what to expect. In this blog post, we will discuss the ins and outs of insolvency.
We will talk about the different types of insolvency, the process of declaring insolvency, and what happens afterward. We will also answer some common questions about insolvency. If you are considering declaring insolvency, this blog post is for you!
What is insolvency?
Insolvency is the legal status of a person or company that cannot repay their debts. When a person or company is insolvent, they are said to be “insolvent.” There are two types of insolvency: personal insolvency and corporate insolvency.
Personal Insolvency
Personal insolvency is when an individual cannot repay their debts. This can happen for many reasons, such as job loss, illness, or divorce. If you are personally insolvent, you may be able to declare bankruptcy. This will allow you to get out of debt and start fresh, but make sure to hire the help of an AZ bankruptcy attorney (or a similar attorney in your area) to ensure any big decisions are made correctly.
This can be broken down into two further categories:
- Self-employed insolvency
- Partnership insolvency
Corporate insolvency
Corporate insolvency is when a company cannot repay its debts. This can happen for many reasons, such as mismanagement or poor sales. If your company is insolvent, you may be able to enter into a corporate insolvency process. This will allow you to repay your debts over time.
What happens when you become insolvent?
Now that we have answered some common questions about insolvency, let’s talk about what happens if you declare insolvency. If you are insolvent, you will need to enter into a formal insolvency process. This process is different for each type of insolvency.
Personal Insolvency
If you are personally insolvent, you may be able to declare bankruptcy. This will allow you to get out of debt and start fresh. You will need to surrender your assets, such as your home or car, and your debts will be discharged. However, bankruptcy will stay on your credit report for six years.
If you are self-employed and insolvent, you may be able to enter into a debt management plan. This will allow you to repay your debts over time. You will need to provide a detailed plan to your creditors, and you may be required to make payments on a regular basis.
If you are in a partnership and insolvent, you may be able to dissolve the partnership. This will allow you to get out of debt and start fresh. You will need to divide your assets and liabilities between the partners, and each partner will be responsible for their own debts.
Corporate insolvency
If your company is insolvent, you may be able to enter into a corporate insolvency process. This will allow you to repay your debts over time. You will need to submit a proposal to your creditors, and you may be required to make payments on a regular basis.
Insolvency with Irwin Insolvency
Insolvency can be a difficult and stressful process. If you are insolvent, you should speak to an Insolvency Practitioner. They can help you understand your options and enter into the best possible solution for your situation. At Irwin Insolvency, we have over 25 years of experience helping people and companies who are insolvent. We can help you every step of the way, from understanding your options to filing for bankruptcy. Contact us today to learn more about how we can help you.
