In some circumstances we have recommended to both individuals and companies that money they owe to creditors could be paid off over time. That based on the financials they have provided, we believe by negotiating with creditors, instead of entering into bankruptcy or Liquidation we may be able to negotiate a debt settlement in full or a payment arrangement for a reduced amount.
Abbott Adams Turnaround specialises in assisting in negotiating these types of debt settlements and informal arrangements and in some cases have used a registered liquidator to act on an informal basis. The approach to creditors is by way of a spreadsheet that provides creditors with a full summary of an individual’s or company’s financial position. The summary is inclusive of what would be available if our client was bankrupted or liquidated, the main advantage to involving all creditors is that any creditor not accepting the offer will be included in a second report to creditors that they have disadvantaged those that had accepted the offer, therefore should a court appointment occur then those creditors that supported the proposal will support any offer made to those appointed, this means formal arrangement will be passed if the majority of creditors accepted the informal proposal. This assists creditors to understand that a person or company although unable to pay their debt in full at that time, have done everything reasonable to assist creditors recover monies owed to them.
When creditors understand and are kept informed of an individual and or companies financial position, the potential to negotiate and provide the creditor with prospects of recovery from accepting an informal proposal as opposed to formal insolvency appointment In our experience they often are open to negotiating a settlement of their debt for a lower amount and in some cases the creditors have consented and allowed a deferred payment of their debt.
Informal arrangements are proposed quickly and efficiently, however having said that the ATO just refuse to negotiate without security being offered, therefore other steps are taken to ensure the vast majority of creditors accept the proposal, so that we can then inform the ATO or any creditor that does not accept, that we would be successful if they pushed for their claim to be dealt with via a formal process.
If you would like to discuss the options available to you, including negotiating informal settlement arrangements, please contact us for an initial obligation free consultation.
Deed of Debt Settlements
Individuals and companies that have judgement claims already and or are subject to proceedings and the individual or company can no longer fund the litigation or satisfy any judgments obtained or may be obtained in the future, we can also help by introducing third party lenders that take security over assets on a basis of creditors accepting a one off payment as full and final settlement.
Abbott Adams are well known for assisting individuals and companies to resolve litigation disputes and dealing with creditors that are commercially minded, as that approach will benefit both parties to the dispute. When negotiating an informal arrangement with creditors, we as a rule, introduce our affiliate solicitors, who then provide the other side with details of the estimated costs to that entity of defending claims against it and refer the other side to our spreadsheet that details the outcomes should our client be forced to make a formal insolvency appointment.
There is no guarantee of achieving a settlement through this process, but it provides further option to those subject to litigation. Third party funding may allow those that cannot afford to continue to fund the litigation to consider continuing or using the funds to settle the disputes on commercial terms.
Examples of Arrangements and Debt Settlements we Have Assisted with
Over the past 30 years our principals have successfully assisted numerous individuals and companies enter informal arrangements and settlements with their creditors, including in respect of the following matters:
- Assisting a large transport company defend a wind-up application by the ATO by proving solvency to the Supreme Court of NSW. The ATO withdrew their wind up application which was claiming the ATO was owed 1.2 million dollars. Our negotiations and presentation to the court, convinced the ATO that they could not accurately quantify the debt they were claiming.
- Assisting a concrete contracting company to negotiate a payment arrangement with the ATO which resulted in the company maintaining its contracts and undertaking to keep all current PAYG and superannuation payments due, paid within the legislative time
- Introducing a Tax Barrister and assisting him to negotiate a payment arrangement with the ATO in respect of amounts claimed. We have on other occasions used the Barrister to argue that a director’s penalty did not apply and have succeeded in having the DPN with-drawn.
- Negotiated and assisted shareholder in a company negotiate a settlement instead of appointing a provisional
- Assisting a company director negotiate a settlement with a landlord in respect of a debt owed prior to liquidating the company. The landlord after negotiations granted an assignment of the debt by the director, as the director had already personally guaranteed the company’s debt or commitment if the company does not meet that obligation.
- Rather than list out the thousands of entities and individuals we have assisted over the years, we are regularly updating the testimonials section of the website.