• Frequently Asked Questions

Frequently Asked Questions

General

LemonAide represents you and discusses your unique situation in a holistic way. A Liquidator is unable to discuss with a Director their personal financial situation or how a Liquidation will affect the Director personally as they have a fiduciary obligation to the Company’s creditors. If a Liquidator did provide such personal advice to the Director they would be conflicted out of taking the role of Liquidator.

While a Bankruptcy Trustee is able to discuss some aspects of your personal financial situation, they are not able to discuss all aspects with you freely. LemonAide, however is able to discuss every aspect of your financial situation with you, freely.

Liquidation and Bankruptcy (Insolvency) are very difficult and specialised area to navigate on your own. As discussed above, a Liquidator or Bankruptcy Trustee can only give you minimal information that relates to your circumstance. LemonAide looks at your situation and offers advice on the alternatives available and how a Company Liquidation will affect you personally.

We hold your hand through every aspect of the Liquidation or Bankruptcy. YOU ARE OUR CLIENT!!! Remember the Liquidator does not represent you, they represent the creditors of the Company. Similarly, remember the Bankruptcy Trustee does not represent you, they represent the creditors of your Bankrupt Estate.

Finally, we have over 15 years practical, hands on experience working for Liquidators and Bankruptcy Trustees. We are able to tell you practically how every aspect of a Liquidation or Bankruptcy will unfold. Rather than someone providing you theories of what could happen, we tell you straight all the options that could happen but also what is most likely to occur. This is the peace of mind that you really need.

In order to provide you the best advice we need to review your financial information to see what it is telling us. During our initial free zoom conference we will tell you what we have found, why and what document is providing that indication to us.

This also depends on you, the complexity of your situation, external factors that are occurring and what other services are needed. Why do I say you? Well, some clients employ LemonAide and then take a long time to get documents to us or implement the strategy, do not be like these clients!!

On average it can take between 2 to 6 weeks of our direct time to work on a clients file. When other services are required, there are times when we are waiting for those services to be finalised. You do not get charged for these times by LemonAide but they can extend the timeframe of a file.

We have completed a corporate restructure in 1 week which did not require any external services (this time frame did not include the Liquidation). This client had sufficient funds to lend the working capital to the new entity. Even though it can be done, it is never recommended to leave things to the last minute.

Definitely not. Even if you have attended court or already appointed a Liquidator or Bankruptcy Trustee and things are not turning out how you thought they would, we can still make a world of difference to improve your situation.

Yes, we help individuals with personal debt every day of the week.

Absolutely, we help all different types of clients deal with their debt problems.

You can, however it is not advisable to do so as your creditors will continue to contact you to press for payment or may begin recovery proceedings against you.

Our costs are reflective of the complexity of your situation however, our rates are highly competitive.

LemonAide clients are generally feeling a range of emotions varying from angry due to their current predicament not solely being of their own making to despondent due to the Company being the only source of income for the family. Clients feel like they are going to lose all the assets that they have spent their life accumulating because they have heard all the horror stories associated with insolvency. Clients also feel like they have no one on their side and no one to talk to.

LemonAide was created to represent the interests of Directors and Individuals going through very challenging time in life. We said LIFE and not financial life because when things are not going well in their financial life it generally spills into other areas of their life, such as; relationships, family life, mental health etc.

We are on YOUR SIDE. We are here to listen to your unique story with empathy and compassion. We will give you guidance on your unique situation meaning all that you need to do is listen to the guidance and follow it so that your long-term future will improve.

In order to provide you with proper advice about your situation we will ask for the following information to be provided:

  • A company – balance sheet, creditors listing, profit and loss, bank reconciliations for a number of months, employee entitlements, bank statements, the ATO running balance account and anything else we think may help us provide you quality advice.

  • An individual – mortgage documents, loan documents, credit card statements, bank statements, creditor statements and anything else we think may help us provide you quality advice.

Basically, we want to provide you with quality actionable advice…but to do that we need to talk to you as well as see what the documents are telling us.

Company Asset Structuring

Asset structuring involves organizing the ownership and control of a company’s assets to protect them from legal claims and financial risks.

Proper asset structuring safeguards your business assets from unexpected events, legal claims, and financial instability, ensuring continuity and protection.

It protects assets by separating them into a holding entity, leasing them to the trading entity, and registering these arrangements on the PPSR to ensure legal security.

The PPSR records security interests in personal property, providing legal recognition and protection for leased or financed assets.

Typically, two Pty Ltd companies are set up: one as the trading entity and the other as the asset holding entity.

The asset holding entity purchases the assets, funded by personal funds or finance companies, and leases them to the trading entity under a registered agreement.

If the trading entity fails to pay, the asset holding entity can reclaim the assets, ensuring they are not lost or tied up in insolvency proceedings.

Yes, it helps by ensuring assets are held separately and securely, protecting them from being claimed by creditors during insolvency.

LemonAide provides guidance and expertise to ensure proper setup and maintenance of asset structuring, helping businesses protect their valuable assets effectively.

Corporate Restructure

A corporate restructure is a process of reorganizing a company’s structure to reduce debt and improve efficiency, giving the business a fresh start.

It helps eliminate insurmountable debt, reduces stress, and allows you to implement changes that prevent future financial issues.

Steps include reviewing financial positions, identifying improvement areas, valuing the business, paying fair consideration for assets, and developing a sustainable strategy.

LemonAide guides you through every step, ensuring proper methodology and fair asset valuation, and helps develop a long-term success strategy.

Yes, with LemonAide’s process, you maintain control of your business throughout the restructuring.

LemonAide focuses on proper asset valuation, fair consideration for assets, and sustainable long-term strategies to ensure lasting success.

Restructuring involves valuing and potentially selling company assets at fair prices, ensuring creditors do not dictate unfair terms.

Book an appointment with LemonAide to begin a thorough review of your business and start the path to financial recovery.

Liquidation

A Liquidation is for companies. In Australia a company cannot go Bankrupt, that is only in the USA. An individual goes bankrupt.

We will look at whether the Company really needs to enter into Liquidation or if there are other options that could be utilised to avoid a Liquidation all together, we will always recommend these services first.

We will look at the Company’s financial situation and the Director’s personal financial situation and make recommendations on actions that should be undertaken to either improve the Company’s situation to return to a profit or to minimise the effects of Liquidation on the Director, Employees or Creditors.

If Liquidation of a Company is recommended it is not necessarily the end of business but part of a bigger strategy to restructure the Company’s business. In any event, if Liquidation has been recommended, we will discuss with you how a Liquidation will affect the Director’s personal financial circumstances.

This is dependent upon one main factor and that is the Liquidator’s investigations. If a Liquidator’s investigations reveal many potential claims that they wish to pursue against various parties, then the Liquidation could be extended beyond a year.

We have seen Liquidation’s completed within 6 months, however this a rarity and not the norm.

Refer to the blog on Voidable transactions here.

On average it will cost around $13,000 to $15,000 to place a company into liquidation where the Company is insolvent.

There are advertisements for low cost liquidation. Refer to our blog here on why there is no such thing as a low cost liquidation.

Personal Asset Structuring

Personal asset structuring involves organizing your assets in a way that provides legal protection and minimizes the risk of loss due to unforeseen circumstances like lawsuits, bankruptcy, or divorce.

Piercing the corporate veil is a legal concept where courts hold company directors personally liable for the company’s debts, disregarding the limited liability protection.

Methods include holding assets in a company structure, establishing trusts, utilizing joint ownership arrangements, and selling and leasing back assets.

Holding assets in a company structure can limit personal liability and protect assets from personal legal claims.

Trusts can separate asset ownership from personal ownership, providing legal protection and potentially favorable tax treatment.

Joint ownership can provide shared control and protection, but it depends on your individual circumstances and goals.

LemonAide provides tailored strategies to structure your assets effectively, protecting them from unforeseen risks and securing your financial future. Book a consultation to explore your options.

Bankruptcy

A Bankruptcy in Australia lasts for 3 years and 1 day as long as you have complied with all of your obligations.

If you have outstanding obligations a Bankruptcy Trustee can object to your automatic discharge until either you have complied with the obligations or for a further 5 years. So, it really is in your best interest to comply with your obligations under a Bankruptcy.

Yes, all debts must be declared in a Bankruptcy. You are not able to only declare some debts as you want to pay them later. Bankruptcy is designed to help you by giving you a completely fresh start.  You may pay some creditors during your bankruptcy if you choose (you are under no legal obligation to do so), however their payment is from after tax and income contributions funds.

Depending on the number of dependents and the amount you earn after tax, you may have to pay your Trustee money through income contributions if you are above the threshold. For every $1 you are over the threshold, $0.50 will need to be paid to your Trustee.

The public Trustee also known as the Official Trustee or the Australian Financial Security Authority (“AFSA”) allows people to go Bankrupt for free.

A private Trustee is a Bankruptcy Trustee that works for a private firm.

Both Trustees must operate by the same rules, however some people feel more comfortable knowing who they are dealing with on a day to day basis and thus employ the services of a private Trustee.

No, a bankruptcy is no longer advertised in the newspaper. The only people that will know of your Bankruptcy are creditors and credit providers if they do a Bankruptcy check on you. So unless you tell people that you are Bankrupt, no one really needs to know about it.

So, your credit report will have that you have been Bankrupt for a period of 2 years after your discharge. The National Personal Insolvency Index (“NPII”) also records that you went Bankrupt, forever. However, it does cost money to do a search of the NPII and not everyone does a search of the NPII when giving credit.

This depends on where you are up to with your creditors and how you have treated them, but Bankruptcy is not necessarily your only option.

I explore your other options when we have a zoom conference with you.

An agreement with creditors is designed so that you do not lose your assets. You may be able to restructure your debts or refinance to obtain some cash to make a proposal to creditors.

This is an option that we do explore when I do a conference with you.

There are a range of options that we can explore not just Bankruptcy, which includes a Section 73 proposal, Part X proposal, Part IX debt agreement or even an informal arrangement with creditors.

I will review your personal financial circumstances and make a recommendation as to which option will suit your unique circumstances, budget and desired outcome.

Company Debts

LemonAide provides expert guidance to navigate company debts, offering strategies to manage and potentially reduce debt while exploring options to keep your business operational.

Consult LemonAide to explore options such as debt restructuring, negotiating payment plans, or legal action to recover owed funds.

No, LemonAide can help assess your business without its significant debts to determine if it can still be viable and potentially thrive.

LemonAide specializes in managing and reducing company debts, providing tailored solutions to keep your business afloat, unlike general advisors who might recommend closure.

Solutions may include debt restructuring, negotiating with creditors, consolidating debts, or exploring alternative financing options.

Yes, LemonAide can provide guidance on managing remaining assets, dealing with creditors, and exploring options to start fresh.

Contact LemonAide for a consultation to assess your financial situation and develop a customized plan to address your debts.

Yes, LemonAide can help negotiate with creditors to secure more manageable repayment terms and potentially reduce the overall debt amount.

LemonAide can help distinguish between necessary operational debts and those that can be restructured or eliminated to improve your business’s financial health.

Personal Debt

It’s important to seek help. Schedule a consultation with LemonAide to discuss your options and create a personalized debt management plan.

Yes, LemonAide specializes in understanding unique financial situations, including unexpected income reductions, and can tailor solutions to fit your needs.

Begin by having a conversation with a LemonAide consultant to explore your options and develop a plan to manage and reduce your debt.

Yes, it’s common to feel scared or anxious about debt, but taking proactive steps can help alleviate these feelings and put you on the path to financial stability.

Avoiding creditors can worsen the situation. LemonAide can help you communicate with creditors and find manageable solutions.

It depends on your financial situation. LemonAide can assess your income and expenses to determine the best strategy for paying off your debt.

LemonAide takes the time to understand each client’s unique circumstances and creates tailored debt management plans, rather than using a one-size-fits-all approach.

Options can include debt consolidation, negotiating with creditors, budgeting assistance, and more. LemonAide will help you identify the best options for your situation.

The timeline varies, but many clients begin to feel relief and see positive changes shortly after implementing their personalized debt management plan.

Company and Personal Debts

LemonAide provides personalized guidance and support, helping you understand how your company and personal debts may intertwine and offering strategies to manage both effectively.

Contact LemonAide for a consultation to explore options that can protect your personal assets while addressing your debt situation.

Unlike liquidators, LemonAide focuses on your interests, providing specific advice on how debt management or liquidation impacts your personal assets.

Liquidation primarily affects company assets, but depending on your situation, personal assets could be at risk. LemonAide can provide guidance on minimizing this risk.

Consulting LemonAide can provide you with a comprehensive understanding of your options and the potential consequences, helping you make informed decisions.

Yes, LemonAide can help negotiate with creditors to create manageable repayment plans and potentially reduce debt amounts.

Company debts can impact personal finances, especially if personal guarantees are involved. LemonAide can help disentangle these debts and protect your assets.

LemonAide offers tailored strategies that include budgeting, debt restructuring, and asset protection to ensure sustainable financial health.