Collect your debts from an insolvent debtor
We tell you what is realistically recoverable and which lever gets you there, before you spend money finding out.Once a debtor genuinely cannot pay, ordinary recovery stops working. Garnishees and writs are built for a debtor who has money and will not part with it, not for one who has run out. What replaces them is a different set of tools, and each one puts you in a different position in a queue that is forming whether you join it or not. Statutory demands, winding up applications, bankruptcy petitions and proofs of debt sit across the Corporations Act 2001 (Cth) (the Corporations Act) and the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act), and they cost different amounts and return different things. So the first job is working out whether there is anything worth recovering, because that answer decides every step after it.
An honest recovery estimate
You find out what is realistically there before you commit money to chasing it.
The right lever, first time
A defective demand or notice costs months, and choosing correctly between the tools is what most of the outcome turns on.
A place in the queue you keep
A proof of debt that is accepted and a vote that is actually cast keeps you inside the distribution rather than outside it.
What can a creditor do when the debtor has no money?
Insolvency law gives creditors a different toolkit from ordinary enforcement. You can serve a statutory demand on a company and apply to wind it up if it does not comply, serve a bankruptcy notice on an individual and petition to bankrupt them, or, where an external administrator has already been appointed, lodge a proof of debt, vote at creditors’ meetings and scrutinise how the administration is being run. Priority is fixed by the Corporations Act and the Bankruptcy Act rather than by who is owed the most, so secured creditors and employees are paid ahead of you, and the timing of your own steps decides how much of what is left ever reaches you.
Can I recover anything once the company is in liquidation?
Usually something, rarely all of it. Unsecured creditors share what is left after secured creditors and employee entitlements are paid, in proportion to what they are owed. To share in anything you have to lodge a proof of debt with the liquidator before the deadline. What that share is worth depends entirely on what the liquidator can realise.
A voluntary administrator has been appointed. What can I still do?
Most enforcement action stops, but your participation does not. Lodge your proof of debt promptly, because it sets your voting power at the creditors’ meeting that decides whether the company enters a deed of company arrangement, goes into liquidation, or is handed back to its directors. That vote is weighted by the value of your debt, so lodging accurately matters.
Is it worth spending money chasing an insolvent debtor?
Sometimes not, and that is worth knowing early. The assessment turns on what assets exist, who has security over them, and whether anything has been moved in the period before the insolvency. We would rather tell you the debt is not recoverable than watch you spend more to confirm it.
What if I think the external administrator is not doing their job?
Practitioners are regulated by ASIC and owe duties to creditors as a whole. If recoveries are not being pursued, fees look excessive or the conduct is questionable, creditors can apply to the court, complain to ASIC, or seek the appointment of a reviewing liquidator. We can advise which of those fits and what the prospects are.
Is there anything left to recover?
Tell us who owes you, how much, and what you know about their position. We will give you an honest read on what is realistically recoverable, which step would get you there and what it would cost, so you are not spending good money chasing bad.
The pool is finite and it is being allocated right now
You are owed money by someone who looks insolvent, and you cannot tell whether that means a reduced recovery or none at all. Other creditors are making decisions that affect what is left for you, a practitioner may already be realising assets, and the deadlines that govern your participation are running whether or not anybody has told you they exist. Spending more money chasing it feels reckless, and doing nothing feels worse.
- We will assess the debtor's position and tell you what is realistically recoverable.
- We will advise which lever fits your situation, whether that is a statutory demand, a winding up application, a bankruptcy petition or a proof of debt.
- We will lodge your proof of debt and represent you at creditors' meetings.
- We will review the external administrator's conduct and press on recoveries that are being left alone.
- We will pursue voidable transaction claims where the facts support them.
You are owed money by someone who has stopped paying anyone
You have supplied this customer for years and the balance has crept up to a number that now matters to your own business. They have stopped returning calls, the last few invoices have gone unanswered, and someone in the industry has told you that you are not the only one waiting. You cannot tell whether they are stalling or genuinely finished. What you do know is that spending more money on recovery might get you paid, or might simply add to what you have already lost.
What's included in your insolvency creditor recovery service
- Debtor asset and recovery assessment.
- Recovery strategy advice, with cost weighed against likely return.
- Statutory demand, bankruptcy notice or petition preparation and service.
- Proof of debt lodgement and creditors' meeting representation.
- External administrator conduct review and voidable transaction claims.
What the patient creditor ends up with
Creditors who wait to be told what is happening recover the least, and the reasons are mechanical rather than unfair. Assets get realised while nobody is asking questions about the price. Proofs of debt lodged late or badly are rejected, which takes you out of the distribution entirely. Voidable transaction claims worth pursuing quietly pass their limitation dates.
An external administrator acts for creditors as a group and funds the work from the estate, so a contested recovery with uncertain prospects often does not get run even when it is the largest asset available. Nobody is doing anything improper. It just means the creditor who reads the reports, asks the questions and pushes on the claims that matter to them ends up with more than the creditor who waits for a dividend notice to arrive in the post.
From an unknown recovery to a position you are holding
We start with the question that decides the rest, which is what is actually there. The debtor’s asset position, what is secured and to whom, what has moved to related parties in the last few years, and whether a practitioner has already been appointed. That tells you whether recovery is realistic before you spend anything pursuing it.
Where no formal process has started, we advise which trigger fits your situation and execute it properly, because a defective statutory demand or bankruptcy notice costs months and hands the debtor an argument. Where one has started, we lodge your proof of debt so it is accepted rather than queried, get you voting at the meetings that decide things, read the practitioner’s reports closely, and press on recoveries that are being left alone. If the facts support a voidable transaction claim, we pursue it.
How we get you to the front
From what is realistically there to what actually reaches you.Size the pool
We assess the debtor's assets, what is secured, what has moved to related parties, and tell you what a realistic recovery looks like.
Pick the lever
We advise which recovery tool fits your position and execute it properly, whether that is a demand, a petition or a proof of debt in an existing administration.
Hold your place
We keep you participating where it counts, at creditors' meetings, on the practitioner's reports, and on any recovery claim worth pressing.
Creditor recovery run by an insolvency-qualified lawyer
There is a particular frustration in watching a recoverable debt become a write-off because nobody took the right step at the right time. It is rarely carelessness. The deadlines in an insolvency are not announced, and most creditors find out about them afterwards.
One of our lawyers holds the ARITA Advanced Certificate in Insolvency and is a member of the Australian Restructuring Insolvency and Turnaround Association. We act for creditors at every stage, from a first statutory demand through creditors’ meetings, contested winding up applications and preference litigation, and we have acted for practitioners too, so we know which questions get answered and which reports repay close reading. We will also tell you when a recovery is not worth chasing, which is often the most useful thing we can say.
Our great lawyer guarantee
Six principles we hold to, whatever you bring us and however long it takes.
Take the time
We listen carefully to understand what you want to achieve, then step you through the advice and the documents.
Share our knowledge
We pass on as much as we can, so you can make your own informed decisions.
Stick to our knitting
We only do what we are good at, so you never pay for our learning.
Work as one team
Someone is always available to answer your question or point you the right way.
Fair pricing
A fixed or capped quote for advice and documents, so you do not carry the price risk.
It is your show
We are in it for a front row seat to witness your success, not for our egos.
Find out what you can actually recover
Tell us who owes you and what you know about their position. We will give you an honest read on the likely recovery, the step that gets you there and what it will cost, before the pool is allocated without you in it.
More on this area of law
Read more about creditor rights, proofs of debt and recovery from insolvent debtors, and how ADLV Law can help.