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Winding-Up & Bankruptcy Proceedings

Where a company or individual is unable to satisfy an outstanding judgment debt, insolvency proceedings may be an appropriate recovery option. Winding-up proceedings apply to companies, while bankruptcy proceedings apply to individuals who meet the relevant legal requirements.

Our lawyers advise businesses on whether insolvency proceedings are suitable based on the circumstances of the debt and assist with commencing winding-up or bankruptcy proceedings where appropriate.

Key Differences in Winding-Up vs Bankruptcy

Winding-Up Proceedings Bankruptcy Proceedings
Applies to companies Applies to individuals
May result in the company being liquidated May result in the individual being declared bankrupt
Assets are administered by a liquidator Assets are administered by the Director General of Insolvency
Used to recover debts owed by companies Used to recover debts owed by individuals

What Happens After Proceedings Are Commenced?

01. Statutory Demand

The debtor is served with a statutory demand requiring payment of the outstanding debt within the prescribed time.

02. Filing the Petition

If payment is not made and the legal requirements are satisfied, a winding-up or bankruptcy petition may be filed in court.

03. Court Hearing

The court considers the petition and any response from the debtor before deciding whether to make the relevant order.

04. Winding-Up or Bankruptcy Order

If the court grants the order, the company enters liquidation or the individual is declared bankrupt.

05. Administration of Assets

A liquidator or the Director General of Insolvency administers the debtor’s assets in accordance with the law, and any recoveries are distributed to creditors based on the applicable legal priorities.

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