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Ask Deborah Awyzio Your Own Question
Deborah Awyzio
Deborah Awyzio, Solicitor
Category: Australia Law
Satisfied Customers: 863
Experience:  Bachelor of Laws (QUT), BIT (QUT), Family Law Accredited Specialist, over 12 years experience
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I put my business into liquidation in January 2013 owing

Customer Question

Hi I put my business into liquidation in January 2013 owing 175k, the liquidator via there lawyers have advised me that I was trading insolvent from as early as the first few months of operation in 2011. I disagree with this analysis and my defence will be that a large debtor who themselves went into liquidation owing my company 50k early on was the main reason I could not service my tax debt which at the end was 140k. Question is do you think that this would be a reasonable defence, also I only started to receive pressure from the tax office in late 2012. All creditors were up to date and or 30 days and company tax returns were up to date a nor did my accountant advise me that I was trading insolvent at any stage.
Submitted: 2 years ago.
Category: Australia Law
Expert:  Leon replied 2 years ago.
Good evening
My name is ***** ***** I am a NSW Solicitor. Thank you for your question, and will do my best to assist you with your question.
If you did not have the finds to pay for your debts and your traded then you are trading insolvent.
You have to have evidence to show you had enough coming in to pay your debts.
Here is what the law says.
http://www.findlaw.com.au/articles/782/what-is-insolvent-trading.aspx
The fact the other party was not paying you, meant that you should not have gone into further debt knowing you could not pay it.
You have a problem and you need tour accountant to back you up showing that you could afford to pay the debts. If not you will be found personally liable.
I hope this makes sense?