A strict order of priority
Unsecured trade creditors rank behind secured creditors and employees.
Insolvency
Recovering money from a company in liquidation
When a debtor goes into liquidation, the recovery path changes completely. Here's what generally happens to your debt, and where the practical limits sit.
When a company that owes you money is placed into liquidation, control of its affairs passes to a liquidator whose job is to realise whatever assets exist and distribute the proceeds to creditors in the order the law sets. Ordinary trade creditors are unsecured, and unsecured creditors generally rank behind secured creditors and employee entitlements — so in many liquidations, the practical return on an unsecured trade debt is small or nil.
Your position is far stronger if you took steps before the insolvency: a registered PPSR security interest or a valid retention-of-title claim can lift you above the unsecured pool, and a personal guarantee may let you pursue a director despite the company's collapse. Once a company is in liquidation, chasing it directly is usually pointless; the right moves are lodging a proof of debt and pursuing any guarantee or security you hold. This is general information, not legal advice — obtain advice from a qualified solicitor or insolvency practitioner. To assess a guarantee or security, refer the account.
What to expect
Once a debtor is wound up
Security changes everything
A registered PPSR interest or valid ROT claim can lift you above the unsecured pool.
Guarantees survive collapse
A personal guarantee may let you pursue a director despite the liquidation.
Get advice early
The best moves are made before insolvency — and with proper advice.
Debtor gone under?
Refer the account and we'll assess any guarantee or security you hold.
Common questions
Frequently asked questions
Can I still recover a debt from a company in liquidation?
Directly, usually only a limited amount, if any — unsecured trade creditors rank behind secured creditors and employees. Lodging a proof of debt and pursuing any guarantee or security you hold are the practical steps.
What improves my chances?
Steps taken before the insolvency: a registered PPSR security interest, a valid retention-of-title claim, or a personal guarantee that lets you pursue a director.
Should I keep chasing the company?
Once it's in liquidation, chasing the company directly is usually pointless. Focus on your proof of debt and any guarantee or security. We can assess the latter.
Is this legal advice?
No — this is general information only. Consult a qualified solicitor or insolvency practitioner.
Get started
Debtor in liquidation?
Refer the account — we'll assess any guarantee or security.