What Should I Do If I Receive A Statutory Demand?

The very first thing you must do when receiving a statutory demand is pay attention. statutory demand IrelandThis is not something you can ignore or even put off for another day, these demands must be answered in a timely manner. A statutory demand is initiated by a creditor as a demand for payment, installments or security on a debt your business owes, and if left unanswered they can request bankruptcy on your company at which point the courts will appoint a receiver, examiner or liquidater to deal with the situation.

Insolvency Adviser

As soon as you receive this type of notification that your company is in distress you should be looking for some advice. There are insolvency consultants you could turn to for help; you may even have an in-house legal adviser who could point you in the right direction. Your answer to a statutory demand is going to be very dependent upon where your company is and if there is any hope of financial recovery. A good insolvency consultant can go through the information with you and point out areas where you could trim costs and begin covering your business debts.

Do it Yourself

Many business owners and individuals want to know if they can handle a statutory demand themselves, and in some cases you can but it will still require prompt attention. In some situations, these demands are issued but not valid, which means you can apply to the courts to have them set aside. Again, this is something you will want to address in a timely fashion, say within 18 days of receiving the statutory demand.

Set Aside Circumstances:
• You dispute the amount of the debt
• You have a counterclaim for more than the current demand against you
• Demand is below a specified sum
• You do not owe the debt

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When Insolvency Can Be To Your Benefit

Insolveny In Ireland - When Insolvency Can Be To Your BenefitAlthough it sounds like a ridiculous statement, it is indeed true – you can turn insolvency to your benefit.

Business insolvency could mean a fresh new start for a sinking company. When a business lacks the ability to pay off its mountain of debts from different creditors, it definitely is not an option to just take no action and stress over these problems for weeks. Your business problems need to be resolved by tackling them head-on.

But “How do I do that?,” you may well ask.

Dealing with the company’s continually increasing debts involves due legal process. And it is better to do this immediately to avoid further damage and risks. This resolution process means seeking external help; you will need solid insolvency advice.

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Understanding the Role of an Insolvency Consultant

Today it is even more common for businesses to find themselves facing economic hardship; everyone is feeling the pinch from the economic downturn. When a business can no longer sustain itself or their liabilities far outweigh their assets, the business is deemed to be insolvent. When it looks like a company is headed down this path an insolvency consultant may be asked to step in and guide the business to firmer ground, or to liquidation. These individuals specialise in insolvency, particularly the laws concerning it.

Assessment

The first thing an insolvency consultant is going to do is look at the business as a whole to determine if restructuring is a possibility. They will check into management backgrounds, assess the assets and liabilities, test the market and then work to come up with a viable solution that is in the best interests of all concerned.

Options

Once the initial assessments are complete, an insolvency consultant will then take you through which options are available to your company. There are several ways to deal with financial difficulties including bankruptcy, liquidation, restructuring and more. Which of these is best for your business will depend on many factors such as whether or not it is a temporary situation. If the market appears to be recovering and your company is not too stretched, you may be able to continue trading.

Example:
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What Is Insolvency?

Insolvency In Ireland - What Is InsolvencyBy definition, insolvency is the inability to pay a debt when it is due, and most businesses fear the idea of becoming insolvent Running a business isn’t all about earning money and spending the profits; it’s also about being able to pay back the people and institutions that helped start your business, and of course to pay your creditors in a timely manner.

Insolvency falls under two categories. The first one is cash flow insolvency, which happens when a business cannot pay its debts on time. The second category is balance sheet insolvency, and this happens when the business has greater amounts of liabilities than assets.

Filing for a bankruptcy is one possible answer when your business is insolvent, though it is by no means the best solution. When a person is served a bankruptcy order, that person will lose valuable assets such as properties, vehicles and stocks. While a bankruptcy order could mean the loss of your house, a minimum delay of a year may be granted.

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