There is no fixed cost for insolvency in Australia. Costs typically include insolvency practitioner fees, legal and asset sale costs, court and regulatory fees, and employee entitlement administration. They’re usually paid from company assets first, and delaying action often increases the total cost and risk for directors.
FREE Download: Corporate Insolvency Costs Cheat Sheet
On This Page
- Introduction
- What Is the Cost of Insolvency?
- Who Pays for Insolvency?
- What Happens If You Can’t Afford Insolvency?
- How Long Does an Insolvency Process Take?
- Next Steps for Directors
- FAQs
Introduction
When insolvency becomes the only way forward, one of the first things directors think about is cost, as cash tightens and decisions feel urgent.
The cost of insolvency depends on many factors, including the pathway taken, the complexity of the business, and how early directors act. It is essential to correctly assess your situation before making the move.
This article explains what insolvency typically costs, who pays those costs, what happens when there are no assets, and why delaying decisions often increases the final bill.
Need a quick overview?
We’ve created a one-page Corporate Insolvency Costs Cheat Sheet that summarises the main cost categories, common cost drivers, and what typically pushes insolvency costs higher or lower. It’s designed for directors who want clarity without legal detail.
What Is the Cost of Insolvency?
There is no single fee for insolvency. Costs vary based on:
- The size and complexity of the business
- The number of creditors
- Whether assets exist
- Whether insolvency is voluntary or forced
- Whether disputes, litigation, or investigations arise
The most important thing for directors to understand is this: Insolvency costs are usually paid first, before unsecured creditors, from whatever money or assets the company has left.
Below is a simple breakdown of the main types of costs you’ll typically see in an insolvency or liquidation.
1. Insolvency Practitioner Fees
This is usually the largest cost.
These insolvency practitioner fees (often referred to as liquidator fees in a liquidation) cover the work required to administer the insolvency process, such as:
Practitioner fees cover things like:
- reviewing the company’s records
- identifying and selling assets
- investigating transactions and director conduct
- dealing with creditors and employees
- reporting to ASIC
- distributing funds (if any)
Fees are usually charged:
- by the hour
- as a fixed fee, or
- as a percentage of assets recovered
If creditors don’t approve the fees, the law sets a maximum default amount (for example, $6,501 excl. GST for many corporate appointments in 2025–26), but this is a fallback — not a typical total cost.
Who pays?
Normally paid from company assets.
If there are no assets, fees may need to be funded upfront by creditors or directors, or the matter may end early.
In some cases, a secured creditor may appoint a receiver, whose fees and sale costs are typically paid from secured assets before any funds reach the company or other creditors.
2. Legal and Professional Costs
Many insolvencies require outside help.
These costs can include:
- lawyers (court applications, debt recovery, disputes)
- accountants or forensic specialists
- business or asset valuers
Costs increase if there are:
- disputed claims
- voidable transaction investigations
- director conduct issues
- court proceedings
Who pays?
Usually paid from company assets as part of the insolvency.
If assets are limited, creditors or directors may be asked to fund specific actions.
Note: When a company has employees, calculating wages, leave, redundancy and superannuation entitlements — and dealing with Fair Entitlements Guarantee (FEG) claims — can significantly increase insolvency costs, particularly if records are incomplete.
3. Asset Realisation and Sale Costs
If the company owns assets, there are costs involved in turning them into cash.
These can include:
- auctioneer or agent commissions
- storage and transport
- insurance while assets are held
- repairs or preparation for sale
- security or site access costs
Even selling assets costs money — and these costs are paid before creditors receive anything.
Who pays?
Paid from sale proceeds before distributions to creditors.
Where a business continues trading during voluntary administration, ongoing operating costs (wages, rent, utilities, insurance) are paid as expenses of the administration.
4. Court and Filing Fees
Not all insolvencies go to court, but some do — especially:
- court-ordered liquidations
- disputes during an administration
- examinations or recovery actions
For example, starting a winding-up proceeding in the Federal Court currently attracts a $5,050 filing fee (as at 1 July 2025), with further fees depending on what happens next.
Who pays?
Usually paid upfront by the party starting the action, but may later be recovered as an insolvency cost if the court allows.
5. Government and Regulatory Fees
Insolvency also involves mandatory reporting and lodgements.
This can include:
- ASIC searches and lodgement fees
- statutory notices and registrations
These fees are generally smaller than practitioner or legal costs, but they are still part of the total expense.
Who pays?
Usually paid from company assets.
Summary: Typical Insolvency Costs at a Glance
| Expense type | Typical cost (AUD) | Who usually pays |
| Insolvency practitioner fees | $10,000 – $100,000+ (varies widely) | Company assets |
| Default statutory remuneration (fallback only) | ~$6,500 excl. GST | Company assets |
| Legal, accounting & forensic costs | $2,000 – $50,000+ | Company assets (or funded if no assets) |
| Asset sale & realisation costs | Depends on assets sold | Paid from sale proceeds |
| Court filing & hearing fees | $500 – $10,000+ | Party bringing action (sometimes recoverable) |
| ASIC fees & charges | Varies | Company assets |
Who Pays for Insolvency?
In most cases:
- Insolvency practitioner fees are paid from company assets first
- Secured assets are applied to secured creditors
- Remaining funds cover costs and priority claims
If the company has no assets or insufficient assets, insolvency firms may:
- Request an upfront indemnity from directors
- Decline appointment unless costs are covered
What Happens If You Can’t Afford Insolvency?
If a company has no assets and no funds to cover insolvency costs, options become limited.
Directors may need to:
- Stop trading to avoid further losses
- Avoid incurring new debts
- Seek advice on the least-cost pathway
In some cases, doing nothing is not cost-free. Delays can increase personal exposure, enforcement risk, and eventual costs.
Early advice helps identify whether:
- A lower-cost process is available
- Restructuring is viable
- Formal insolvency can be avoided altogether
How Long Does an Insolvency Process Take?
There is no fixed timeframe.
- Simple liquidations may conclude within months
- Complex matters can take years
- Restructuring timelines depend on creditor response and compliance
What does have strict timing is creditor enforcement and ATO escalation once formal notices are issued.
Before decisions are forced, clarity matters
Our one-page Corporate Insolvency Costs Cheat Sheet gives directors a practical snapshot of where costs arise, what can keep them contained and common misconceptions related to insolvency — designed to support early, informed decision-making.
Next Steps for Directors
If cost is your primary concern, the priority is clarity.
Practical steps include:
- Understanding whether the company can meet debts in the short term
- Identifying whether the business is viable or not
- Estimating realistic costs before deadlines force action
- Speaking with an insolvency practitioner early for a tailored view
Many insolvency firms offer an initial consultation at no cost. That conversation often determines whether costs can be contained or are about to escalate.
At Halo Advisory, we work for you — the director. Financial expert Greg Bartels offers a no-obligation, confidential conversation to help you understand where you stand, what risks exist, and what options are realistically available before deadlines reduce control. Get in touch today.
FAQs
How much does insolvency usually cost?
There is no fixed cost of insolvency. Costs vary widely depending on the process and complexity. Simple liquidations may cost under $15,000, while complex matters can exceed $50,000. Early advice helps avoid unnecessary escalation. Talk to a professional financial adviser at Halo Advisory today. Also, if you want a quick cheat sheet to look over the main cost drivers without the legal detail, Download the FREE Cheat Sheet
Who pays if the company has no assets?
If there are no assets, insolvency practitioners may request an upfront payment or indemnity from directors. Without funding, formal insolvency options may be limited.
Does delaying insolvency increase costs?
In many cases, yes. Delay often leads to:
- Court proceedings instead of voluntary appointments
- Higher liquidator investigation costs
- Legal disputes with creditors
- Reduced asset recoveries
- Increased director exposure
Insolvency itself does not automatically create high costs. Loss of control and timing do.
How much do insolvency practitioners charge?
There is no fixed fee for insolvency services. The insolvency practitioner cost depends on factors such as the size of the business, the number of creditors, whether assets must be sold, and whether investigations or legal disputes arise.
Fees are usually charged hourly, as a fixed fee, or as a percentage of assets recovered, and are typically paid from company assets before unsecured creditors receive any distribution.
What if Australian company directors can’t afford liquidation?
If a company has no assets or funds available, a liquidator may request an upfront indemnity or funding from directors or creditors before accepting the appointment. If funding is not available, directors should seek professional advice early to understand the least-cost options and avoid increasing personal risk.
