Understanding the Role and Benefits Of An Auckland Insolvency Lawyer

If a business or a private individual is suffering from financial distresses and major challenges, it might be time to talk to an Auckland insolvency lawyer. Financial hardship is tough, exhausting, and panic can set in. At times like this, often people cannot see a way out.  Insolvency lawyers can help you understand your situation, the options open to you, and help you carry out any subsequent actions that might be needed.

 

Here, we explore the various ways in which an Auckland insolvency lawyer can assist you.

Expert Legal Advice

Insolvency might seem like a good way out of your financial problems but what is involved and what are the consequences? An experienced insolvency lawyer will be able to explain these issues for you.

 

Often, when you are deep in debt, struggling with finances, and income, it can seem as though you are the only one in such a bad situation. A lawyer with expertise in insolvency matters will help you understand that, while it is difficult, you are far from alone.

 

Their advice will make you aware your rights, and obligations. They will also fully explain the potential consequences of different actions available to you so that you can make informed decisions about your situation and ways forward.

Debt Management and Negotiation

Overwhelming debt is a common cause for seeking insolvency. Oftentimes, debt is taken on under unfavourable terms which impose an undue strain on the business.

 

Faced with either losing all of the debt owed to them or renegotiating the loan, many lenders will negotiate different terms. Given that most people do not like to negotiate, an insolvency lawyer can help or even conduct negotiations with creditors. They can work to restructure debt and possibly even reduce the total amount owed.

 

Other options include working out a repayment plan that is more manageable for your business.

 

Being experienced negotiators, and also knowing the finance industry better than their clients, the insolvency lawyers can often secure more favourable terms than the borrower might be able to achieve on their own.

Business Restructuring

For businesses facing financial difficulties, restructuring operations can be a good option. This can be a range of actions including:

• Selling under-performing assets.
• Selling non-essential assets to raise cash.
• Reducing staff numbers through redundancy.
• Changing the structure of the business.

 

The goal of business restructuring is to improve the company’s financial health and viability, allowing it to continue operations and eventually return to profitability.

 

Many of those tasks will require the support of a lawyer who can guide people through the various processes and carry out the necessary tasks.

 

If a company is taking the redundancy option, this needs extra special care and attention as the laws are very complex.

 

An insolvency lawyer will make sure that all actions comply with legal requirements and do not leave the business open to further financial challenges.

Filing for Bankruptcy

Occasionally, filing for bankruptcy may be the best course of action. There are quite severe medium-term consequences of taking the bankruptcy route. Auckland insolvency lawyer will talk to their clients and discuss whether this is the right option explaining the ongoing issues.

 

If the client and their lawyer decide that bankruptcy is the way forward, they will help the person though the process. This will include preparing and filing the necessary documentation with the Insolvency and Trustee Service.

 

Be aware, that when you go bankrupt, your debts are cleared, and creditors can no longer chase you for settlement. This may sound like a good option however you give up many rights and assets. The Official Assignee, the government department that manages bankruptcy, has control over everything you own apart from items like your clothes and household appliances. They can sell your assets such as the high-end car and allow you to buy a much cheaper one so that you can get around.

 

If you are applying for a job, you must declare your current financial state to potential employers.

 

The OA can also have an input on work that you might do especially if you want to work for yourself.

Liquidation

If a business is no longer viable, winding up its affairs via liquidation may be the answer. An insolvency lawyer can manage the liquidation, seeing that assets are sold off and any proceeds distributed to relevant creditors.

Advising Directors of Their Duties

Company directors have specific legal duties and responsibilities. This is especially the case when trading is difficult, and their business is facing insolvency.  Failing to comply with their duties can result in personal liability.

 

By talking to one of the Auckland insolvency lawyers, a director can get the necessary guidance about their obligations and what they are supposed to do. Sometimes the directors remain optimistic and think they can trade their way out of the problem, but this is rarely the case. Doing so can open themselves to further problems of trading while insolvent.

Support Throughout the Process

Insolvency is complex and often is emotionally fraught. An experienced Auckland insolvency lawyer like McVeagh Fleming, can bring clarity to your thinking, and help you through the various processes and tasks before you. The knowledge and compassion of an experienced guide can make life a lot easier.

 

If your business is struggling, talk to one of the insolvency lawyers at McVeagh Fleming.