Financial troubles often make individuals and businesses seek legal assistance. Two types of professionals common in these scenarios are corporate insolvency and bankruptcy lawyers in Perth WA. They both work with monetary issues, but their roles are not identical. Understanding these differences will help ensure the right kind of legal professional is selected to handle a specific financial crisis. Let’s take a look at this blog, as we have discussed both the concepts in detail.
The most basic level at which the distinction between lawyers offering corporate insolvency services and those dealing with bankruptcy can be drawn is the type of clients they serve. The first kind specialises in corporations, which are usually businesses insolvent.
Their area of specialisation is assisting firms to go through financial hardships without bankruptcy. It is applicable for businesses that cannot pay their debts on time, but there is still a hope of reviving the company through different measures.
The second category of legal professionals represents both individuals and businesses. They handle cases wherein bankruptcy is either the most viable option or it is the only choice left. It involves the judicial declaration of insolvency to the extent of an inability to discharge outstanding debts. It is often coupled with a legal plan of liquidation or reorganisation.
The approach that these two types of lawyers take when addressing financial distress varies significantly. A corporate insolvency lawyer’s ultimate objective is to rescue the business and avoid bankruptcy. They focus on restructuring the company, negotiating with creditors regarding new terms and all possible means to turn around the operations of a company.
One can select voluntary arrangements with creditors, administration, or selling off parts of the business deemed non-core to get the business back onto its feet. In other words, the corporate insolvency lawyer attempts not to let the company go bankrupt.
Bankruptcy lawyers work through declaring and filing for bankruptcy. The lawyer oversees the liquidation of assets to refund the creditors or organise the debts of the business or individual within the legal structure. Their role is called into play when a financial collapse is imminent, and the resolution of debts is desired via the courts.
Corporate insolvency lawyers in Perth deal with the very complex legal procedures involved in creditor negotiations and company voluntary arrangements or CVAs. Typically, they work with financial advisors, accountants, and business management teams to restructure the business and prevent bankruptcy.
Bankruptcy lawyers specialise in the corresponding legal frameworks on which bankruptcy filings are based, such as that of individuals and companies. Their main task is to ensure that the bankruptcy procedures are correct and just. In simpler terms, they will defend either the rights of the debtor or the creditor based on whom they are representing.
These legal professionals have different intended results based on the financial scenario. A corporate insolvency lawyer would try to rescue the business. Through restructuring operations and debt renegotiation along with selling assets, they attempt to stabilise the company and allow it to carry out business operations without declaring bankruptcy.
A bankruptcy lawyer’s role is to settle insolvency legally. It would either involve liquidating assets to repay creditors or adjusting the debts of the business so that it can proceed with its operations. A personal bankruptcy lawyer will then help a person manage or eliminate his debts lawfully and protect his rights.
These legal professionals handle various types or levels of financial distress. A corporate insolvency lawyer becomes involved when a business has reached the point of being troublesome but potentially still salvageable at some level. Involvement by these attorneys occurs when there is some prospect of saving the business if there is a serious level of financial stress involved.
The other type of lawyer is required when financial distress has progressed to the point where recovery becomes impossible except with the final assault of formal legal action. Bankruptcy is usually considered a last resort, and therefore, this kind of legal professional plays the final stages of a financial collapse when debts are going to be either eliminated or restructured by the law.
The first category of legal professionals comes into play when you need a personal insolvency agreement. Meanwhile, bankruptcy lawyers are the last option available during times of financial trouble.