Creditor Rights in Liquidation & Administration

Supporting Creditors Rights in Liquidation

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Supporting Creditors Rights in Liquidation

Creditors Have Rights

Liquidated Companies List

Are you worried that a business who owes you money is in liquidation or administration? Search below, then find out what to do

FREE EXPERT ADVICE

When it comes to getting paid, get on to the front foot! The first step is to understand your options. Often, just upping the urgency of the matter by using a debt collector or a solicitor’s letter results in getting payment. Other steps, like Deeds of Repayment or

Forbearance, enforcing security rights, taking action against directors or agents, and retrieving goods are amongst the ways forward in addition to a straight legal claim. Whether the debtor is bankrupt or not investigate your options before writing the debt off.

See our debt collection advice for more information

If you have unpaid invoices and the debtor has your goods you might be able to retrieve the goods. You will need a retention of title clause and a PPS registration. What’s a PPS registration?

To have a vote at a meeting on an insolvent company or bankrupt individual you need to be a creditor and have lodged a proof of debt.

Beware that if you have rights as a secured creditor you could be deemed to have given up your security by voting. Get advice. For more detailed information see our information sheets here

Secured creditors have a priority in liquidations and bankruptcies and often get paid in full.

To become secured you’ll need to have the right sort of legal clause in your documentation, be registered on the PPSR or in some cases there is legislation that helps elevate unsecured creditors to secured.

Sign up for the Stratos Legal Creditors Package and find out where you stand.

The Personal Property Securities Register (PPSR) records information about security claims and money owed on goods.
 
For example electrical goods, consignments of goods and even items of personal property. So for example, to check if a car you’re buying has an unpaid loan attached to it, you can find out by running a search on the register.
 
There are a few exceptions to the items you can register under the PPSR (such as land and buildings) but most goods, and even loans between family members can be registered. You do need to register things correctly however, so it pays to get advice.

If a debtor goes bust creditors need to take care of their own position. Be wary in your communications with the liquidator as you might be exposing yourself!

Legal Aid doesn’t fund these sorts of matters. Whatever you do don’t deal with someone who has no qualifications. You would not have an unqualified electrician touch your house so don’t let an unqualified adviser near your business affairs.

If the debtor is in liquidation or bankrupt get legal advice. Sign up for our Creditors Package and find out where you stand.

A proof of debt is an official form an unsecured creditor must fill out to enable them to vote, to be kept informed, and most importantly receive a dividend from a liquidation or bankruptcy.

Proofs of Debt get adjudicated on by the liquidator, administrator or bankruptcy trustee, and they act as the Judge and jury in deciding whether or not you are a creditor and for how much.

We have a basic Proof of Debt Form or for $275 sign up for our The Stratos Legal Creditors Package and they will help you with it.

  1. Make sure you are a creditor.
  2. Make sure you are an unsecured creditor.
  3. Do it once and do it right and you might not need to do anything more.

Download our form

For companies in liquidation the Corporations Act sets out the order in which a liquidator is to pay money.

When a company goes into liquidation, control is taken from the directors and given to a liquidator.

A liquidator is a specially qualified accountant who winds up the affairs of the company in accordance with the Corporations Act.

The liquidator secures the assets, works out who are the creditors, investigates what went wrong, may take action to recover money and then distributes what has been recovered as a dividend.

If the liquidator is alleging a preference, be wary, and get legal advice. Read this article about Preference Payments.

Employees receive a priority in company liquidations. It is essential that you contact the liquidator as soon as possible so you can claim. There is special government program called FEGS that will pay most of your entitlements.

If the business has closed down but you don’t know what has happened contact us – we will check it for employees, free of charge.

Some subcontractors are properly classified as employees and can get paid in priority. Some subcontractors might have rights to be a secured creditor.

If you are in building and construction you might have special rights to claim a Subcontractor Charge (there are strict time limits so act quickly).

Get advice. Sign up for our Creditor Package and find out where you stand.

We provide you with everything you need to apply to recover business debts or goods from the liquidator. Now’s the time to act!

What the Creditor Package includes:

  • Advice on the best way to collect the debt.
  • A Letter of Demand (if appropriate).
  • If you have a Personal Guarantee, a preliminary investigation into the director’s assets.
  • Review of your Proof of Debt in the administration.
  • Advice on what Creditor Report really means and how you should vote.
  • Review of Terms of Trade to make sure you are protected going forward.

Stratos Legal explain why it’s important to be secured on all sorts of loans and transactions