Posted by Revive Financial on Sep 27, 2012 4:12:00 PM

What is Insolvency?

Insolvency is a financial state where you simply can not afford to pay your financial commitments. Close to 70% of Australians said they are experiencing financial distress. Of that near 70%, thousands are experiencing severe debt. When your debt gets to the point when you can no longer make the repayments when they  fall due, you enter a state of insolvency.

Insolvency means you are in a financial position where you don't have enough money to pay your debts when they fall due. There are two types of insolvency, cash-flow insolvency and balance sheet insolvency. Cash-flow insolvency is when your money won't cover your debts but you may have enough equity in assets to cover them. Balance-sheet insolvency is when you neither have enough money and the value of your assets isn't high enough to cover your liabilities (debts).

Insolvency Versus Bankruptcy: There is a Difference

Being in a state of Insolvency and having to declare bankruptcy are often confused and seen as one in the same. However insolvency and bankruptcy, while related, are two very different things. Insolvency is defined as a financial condition and is a word used to describe a position you are in. Bankruptcy is a legal procedure which arises if an insolvent person cannot find a way to improve their situation.

There are plenty of solutions an insolvent person can pursue before resorting to declaring bankruptcy. Revive Financial is a personal debt management company which specialises in providing these solutions.

Is-Your-Business-In-Financial-Distress

Positive Solutions to Your Bad Debt

As soon as you become insolvent you must take immediate action to rectify your financial situation. This can mean generating cash by getting another job or selling unused household items, cutting back on living expenses or consolidating or refinancing your current loans and debts.

If your debt is more severe, Revive Financial might suggest you enter an Informal Agreement. This allows the experienced case managers at Revive Financial to look at your personal finances to find out how much you can afford to repay. From this information, they will negotiate with your creditors to develop an informal agreement which allows you more time and space to pay off a negotiated amount from your debts.

If your creditors don't agree to the Debtstroyer Agreement, Revive Financial could then propose a formal Debt Agreement. While this is considered a form of bankruptcy, it won't have the same restrictions and ramifications, allowing you a little more freedom.

Take Action Now to Avoid Being Insolvent

If you think you are heading down the path to insolvency, contact Revive Financial today and Talk to an Aussie Who Cares. They can help you on the road to recovery before bankruptcy becomes your only option.

Topics: Debt Relief, Personal Debt

How Can We Assist You Today?

Business Debt Icon Business
Personal Debt Icon Personal
Please select an assistance option to continue.

Types Of Unsecured Debts

Credit Card Icon Credit/Store Cards
Personal Loan Icon Personal Loan
Pay Day Loan Icon Pay Day Loan
Tax Debt Icon Tax Debt
Disconnected Utilities Icon Utility Bill
Other Debts Icon Other
Please select at least one type of unsecured debt.

Your Business Structure

Sole Trader Icon Sole Trader
Partnership Icon Partnership
Company Icon Pty Ltd Company
Tax Debt Icon Trust
Please select at business structure to continue.

Unsecured Debt Amount

$8,000
$1,000
$100,000+

Business Debt Amount

$100,000
$10,000
$1,000,000+

Take Back Control Today!

First Name

Last Name

Email

Phone Number

Phone number must be 10-digits long and begin with a 0. (e.g. 04 1234 5678)

Post Code

Post code must be 4-digits long (e.g. 4567)

Some of your details appear incorrect.
Please update the highlighted fields and re-submit.

Congratulations

You’ve taken the first step to steer your business back to viability

Let’s keep the momentum going, take the second step by linking your Xero account now.

Congratulations

You've taken the first step to becoming debt free

Let's keep the momentum going, take the second step now and complete the assessment form.

By submitting this form you acknowledge that you have read and accept our Privacy Policy