Liquidators are not your friend!

Liquidators are not your friend!

If you find yourself trapped in an impossible financial corner you may have been told by your Financial Advisor, Accountant, Solicitor or even a friend to contact a liquidator and place your business into Voluntary Liquidation. But this may not be the right option for you. You see, the mistaken idea is that because you are paying the Liquidator they will look after your best interests and help you get back on your feet. Sounds logical, right? But the reality is, NOTHING COULD BE FURTHER FROM THE TRUTH!

What we have found is that Liquidators, Administrators and Receivers are usually nice people … but, once you appoint them, it is their responsibility to look after your Creditors (people you owe money to) not you! Their job is to sell off your assets and recoup as much cash as possible from your company and pay it to your creditors! If for one minute you think they will consider your best interests you are sadly mistaken. You do not even factor into the equation.

Once you sign the documents to appoint a Liquidator, that’s it! You’re no longer in control. You are no longer the Director. You no longer have any say over the company, its customers, or assets. T they’ll even change the locks on the doors. The liquidator (you paid) will do whatever they think is in the best interests of the creditors. And in most cases you have just paid for your own business death! Is that what you want?
Now maybe you’re thinking this can’t be right. Maybe you still think that because you’re paying the Liquidator’s bill you have a say in what happens next. Here’s why you don’t:

The liquidation process is highly regulated. If the liquidator you appoint steps outside the regulations they face serious consequences. They have a responsibility to act within the guidelines and quite simply that means to sell off whatever they can and pay it to your creditors.

One Director told me

“You were right you know, I should have listened to you. My accountant told me to liquidate my business so I did. He told me that because I am paying for my own liquidator and that it would be a Voluntary liquidation, I wouldn’t have a problem. They would look after. But he was dead WRONG! “I will never forget I met with the Liquidator at about lunchtime on a Friday, I paid him on the spot, thousands of dollars, and they seemed like very nice professional people. They told me they would help me as much as they could to work through my debts. I gave them all the financials of the business a list of assets etc, it all seemed to be going smoothly. Wow, was I in for a shock. The minute I signed the paperwork the Liquidator asked for the keys and that was it. Everything was taken out of my hands and I was even locked out of my own business. By the end of the following Monday my bank accounts were frozen, my customers were all informed I was no longer the business owner, and I was locked out of my own business. 23 years of hard work gone in a weekend. What I thought was going to help my situation turned out to be my worst nightmare. I lost everything!”
This is an all too familiar story.

What’s the solution?

At Liquidation Hobart we believe preparation is the key to getting the right outcome for our clients. We believe you should NEVER appoint a liquidator without getting the right advice first, no matter how bad your situation seems right now. Whether a liquidator has been appointed by the courts, or you appoint them voluntarily yourself, there is plenty you must know and do to get the best possible outcome. The key is; involve us before you call a liquidator. We are pre-insolvency specialists. It is that simple.

One of questions we get asked the most is “Can I continue to run a business if I have been the director of a company that has been liquidated?”

The answer is yes, but there are a number of regulations and laws in place that need to be abided by if you are to spare yourself pain down the track. You will need to ensure you structure things the right way moving forward. And that’s one of the things we will advise you on. Liquidation doesn’t need to be the end of your business as so many people think. We can help you chart a safe course through this and rebuild a new life after liquidation. You do have options, but in most cases people simply don’t know what they are. We can explain your options and help you achieve your goals. You may just want to be debt free and move on, we can help you achieve that too.

How can Liquidation Hobart Help You?

We help you discover what options are available to you depending on your circumstances, then, we recommend what course of action would deliver you the best possible outcome. We help you protect whatever we can. We communicate the right way with your creditors, the Liquidator if required, the ATO, Work Cover and others that are pressuring you. Sometimes communication is all that’s needed, sometimes winding up the company is the answer and sometimes negotiation is required. Whatever is required, we will help you work through a plan and support you through the entire process. If you need to talk to someone, or need a free consultation, call Liquidation Hobart 1300 818 575.