Recovering debt from a company

The company is in liquidation, receivership, or voluntary administration

If the company that owes you money is in liquidation in the first instance you should make contact with the liquidator to make sure your claim for money owed is registered.

You can search the companies register free of charge to find out the current status of the company and, if the company is in liquidation, the contact details for the liquidator.

The same applies for companies in receivership or voluntary administration.  In these cases you should contact the receiver or the administrator.

• Search the Companies Register now (FREE)
• Learn more about liquidation, receivership, or voluntary administration

Secured creditors

A secured creditor is a creditor which has the benefit of a security interest over some or all of the assets of the debtor company.  In many cases the existence of a security interest is recorded on the  Personal Property Securities Register ( PPSR) as a financing statement.  Visit the PPSR website now to learn more about searching for or registering financing statements.

The contract that created the security interest will usually contain clauses outlining each party’s rights if there is a default. (For example, if a debtor company doesn’t pay the amounts owed under the contract the secured creditor may be able to repossess items described in the contract).

Unsecured creditors

An unsecured creditor is a creditor who does not have the benefit of any security interests in the assets of the debtor. Unsecured creditors are generally not able to seize debtor’s assets to settle their outstanding debt.

There a number of options that you can consider to recover the money owed to you –

• Approaching the debtor company and asking them to pay what is owed. 
  You may choose to make this approach yourself or by employing a debt collector to act on your behalf.  The options you choose when making this approach may vary from debtor to debtor, and will often depend on the size of the debt and the apparent willingness or ability of the debtor company to pay (For instance, is it that they won’t pay or can’t pay).  Some may need only a gentle reminder; others may require a stronger approach.
• Initiating Court action to recover the debt. 
  This is a more formal and potentially costly step to take and would normally only be considered if it was economically viable and as a last resort. Court action may involve –
  • Obtaining judgment – that is, getting an order from the Court or the  Disputes Tribunal stating that the debt is owed.
  • Enforcing judgment – that is, getting the Court to enforce payment if the debtor doesn’t pay what is owed (even after the creditor has obtained judgment). This could include applying to the Court to put the company into liquidation.

Seek professional advice

If you are unsure what your rights are as a creditor, or how to exercise those rights, you should seek professional advice.