August 16, 2015

Negotiating with creditors – how to review your financial position

Along with our usual insolvency administrations, we are often asked by clients who may have one debt or several debts, to review their financial position and negotiate with their creditors.  The benefits of this include:

  • We can review their financial position from an insolvency practitioner’s perspective;
  • We can advise what the likely recoveries or dividend may be if they were to enter into a formal insolvency arrangement (Part X, bankruptcy, voluntary administration, liquidation, receivership); and
  • We can negotiate the settlement of their debts without them having to enter into a formal insolvency arrangement.

Some recent successes include:

We acted for a client who personally guaranteed the lease for their former partner’s business premises.  This debt was the only debt our client had.  Our client had nothing to do with the business and the debt was substantial (over $400k).  We reviewed our client’s financial position and confirmed if they were to be made bankrupt there would be no recoveries or a dividend paid to the creditor.  We negotiated a settlement of the debt for our client so they could move on with their life and not have the debt hanging over their head.  Our client is now saving to purchase a property.

We acted for clients who owed a substantial amount to a big 4 bank for shortfalls from the sale of their 2 properties and amounts owed on their credit cards.  One of the clients was experiencing severe depression and as a consequence could not work.  This resulted in the clients not being able to keep the properties and living off their credit cards.  The client’s partner and doctors believed if they were to be made bankrupt this would have an adverse effect on the client’s health.

We reviewed our clients’ financial position,  provided evidence of the client’s medical condition to the bank and negotiated a settlement of the total debt to the bank on their behalf.  As a consequence the client was able to rehabilitate themselves without the added pressure and stress of bankruptcy.

How we can help

At SV Partners we have the knowledge, experience and skills to assist clients who may be experiencing financial difficulty negotiate with their creditors.

If you have any clients who may require assistance please contact us on 1800 246 801 to speak to one of our insolvency experts.

Article written by Leon Lee, Senior Manager, Queensland.

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