Debt & Insolvency FAQs

Q: I received a Statutory Demand. What do I do?

You must act within 21 days. Typically, you must either pay the debt, secure it, or apply to the Court to set the demand aside. If you fail to act, your company is presumed insolvent and can be wound up by the Court.

Q: What is the difference between Bankruptcy and Liquidation?

Bankruptcy applies to individuals who cannot pay their debts. Liquidation (Winding Up) applies to companies. Bankruptcy typically lasts 3 years, whereas liquidation usually results in the end of the company's existence and the distribution of assets to creditors.

Q: What is a Winding Up Application?

A Winding Up Application is a court proceeding filed by a creditor to force a company into liquidation for unpaid debts. It usually follows an expired Statutory Demand.

Q: Can I keep my house if I declare bankruptcy?

Often no, but it depends on the equity. Your share of equity transfers to your Trustee, but options like 'equity buy-backs' by a spouse are common strategies to retain the family home.

Q: What is a Director Penalty Notice (DPN)?

A DPN is an ATO notice making a company director personally liable for company tax debts like PAYG and Super. You have 21 days to respond before your personal assets are at risk.

experienced answers on bankruptcy, Statutory Demands, company winding-up, and insolvency options for individuals and businesses in Queensland.

Important Legal Disclaimer

The information provided on this page is general legal information only and is not specific legal advice tailored to your individual circumstances. Laws change regularly and every situation is unique.

We strongly advise you to contact us to discuss your specific situation before proceeding with any action based on the information provided here.

Bankruptcy

Can I keep my house if I declare bankruptcy?

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 fro…

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Corporate

What is a Director Penalty Notice (DPN)?

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…

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Court Process

What is a Winding Up Application?

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 succes…

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Insolvency

I received a Statutory Demand. What do I do?

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…

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What is the difference between Bankruptcy and Liquidation?

The key difference is who is insolvent. ‘Bankruptcy’ applies to individuals (natural persons). ‘Liquidation’ (Winding Up) applies to companies. While bankrup…

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