When Do You Need an Insolvency Lawyer Near Me?
Insolvency arises when an individual or entity is in a state where they cannot fulfill their financial duties. Even though insolvency may lead to bankruptcy proceedings, insolvency is not the same as bankruptcy. Bankruptcy is a legal proceeding that can be used to determine the extent of insolvency and to determine potential remedies for the situation.
Insolvency may lead to legal repercussions, including insolvency proceedings. During these proceedings, legal action is taken against the insolvent party and their assets are liquidated, or sold off, in order to pay off debts.
When a party is declared legally insolvent, there may also be other implications. If this occurs, businesses may not be able to continue operations or parties may be able to claim certain rights against insolvent parties.
There are different types of insolvency, including:
- Balance sheet insolvency;
- Cash flow insolvency; and
- Accounting insolvency.
Balance sheet insolvency arises when a party’s liabilities exceed their assets. For example, if they have more debt than items they own.
Cash flow insolvency is a lack of liquidity in order to pay off a party’s debts. This type of insolvency may result in balance sheet insolvency.
Accounting insolvency arises when total liabilities exceed total assets, such as a negative net worth. With this insolvency, the value of a business’ liabilities exceed the value of its assets.
If an individual or business is stuffing from issues related to insolvency, a lawyer can help them examine their options.
How Much Does It Cost to Hire an Insolvency Lawyer in Canada?
The cost of an insolvency lawyer in Canada will vary greatly depending on numerous factors, including:
- The location of the case;
- The expertise of the lawyer;
- The amount of time the case is expected to take and its difficulty; and
- The type of debt and the legal issues the individual is facing.
On average, lawyers in Canada charge between $330 and $1,616 Canadian dollars per hour, depending on the factors listed above as well as others.
What to Look For in a Insolvency Lawyer?
Typically, insolvency itself is not considered a legal issue. It is, however, often a key factor in many legal disputes and lawsuits.
In addition, if a party is in a state of insolvency, it often leads to legal disputes or issues. Examples of legal issues that may be associated with insolvency include:
- Bankruptcy;
- Disputes over whether a debt is eligible to be discharged or not;
- Long-term effects on a party’s credit and their credit score;
- Difficulty obtaining a fair mortgage rate;
- Effects on other financial aspects, such as alimony, child support, and garnishment of wages; and
- Other legal effects, for example, effects on tax issues and gift-giving statutes.
Debt collection is one of the issues that is commonly associated with insolvency. Creditors may attempt to collect debts from borrowers who are insolvent.
Depending on the circumstances of a situation, for example, whether an individual has filed for bankruptcy, their insolvency status can affect their claim in different ways.
How to Prepare for Your Consultation With a Insolvency Lawyer?
Although facing insolvency may be a stressful situation, a lawyer can help. Before a consultation, an individual should collect any financial documents they have so their attorney can review them.
In addition, an individual should bring any correspondence from debt collectors, courts, or any other parties in relation to their financial issues. If in doubt about something, it is best to bring it to the consultation and allow the lawyer to decide.
Where to Find the Best Insolvency Lawyers in Canada?
If you believe you may be insolvent or you need help with your insolvency issues, you should consult with a skilled and knowledgeable finance lawyer as soon as possible. Your lawyer can assist you with understanding your rights, legal options, and obligations.
In addition, your lawyer can advise you of any bankruptcy laws that may affect your situation. When you are searching for the best insolvency lawyers in Canada, LegalMatch is a great place to start.
