Debt & Insolvency FAQs

In many cases, no. Your share of any real estate equity typically transfers to your Bankruptcy Trustee. However, you may be able to ‘buy back’ the equity from the Trustee, or if the house has no equity (is ‘underwater’), the Trustee may allow you to stay while you continue paying the mortgage.

A Director Penalty Notice (DPN) is a powerful tool used by the ATO to make company directors personally liable for a company’s unpaid tax debts, specifically PAYG withholding, Superannuation Guarantee Charge (SGC), and GST. Receiving one is a critical legal emergency.

A Winding Up Application is a court process initiated by a creditor (usually after a Statutory Demand expires) to force a company into liquidation. If successful, the Court appoints a liquidator to take control of the company, sell its assets, and pay creditors.

A Statutory Demand is a critical legal document. You have exactly 21 days to either pay the full amount or apply to the Supreme Court to set it aside. If you do nothing, your company is legally presumed insolvent, and the creditor can immediately apply to wind up (liquidate) your company. Do not ignore it.

The key difference is who is insolvent. ‘Bankruptcy’ applies to individuals (natural persons). ‘Liquidation’ (Winding Up) applies to companies. While bankruptcy generally lasts for 3 years and releases you from most debts, liquidation usually results in the permanent closure of the company.