Creditors who act early, and in the right order, recover more than those who wait. Before trouble starts, that means signed terms, correct PPSR registrations and guarantees. Once a customer is struggling or insolvent, it means choosing the right recovery tool, asserting your rights quickly and lodging your claim on time.

Why this matters now

ASIC data shows 2,706 Queensland companies entered external administration in 2025–26. July and August 2026 were 10.3% higher than a year earlier. Our Queensland insolvency statistics set out the detail.

The Bathla Group collapse showed how exposed trade creditors become when a large customer fails. Unsecured creditors are paid only after secured creditors and employees, and may receive little or nothing.

Before trouble: set up to be paid

  1. Signed terms of trade. Include a retention of title clause that also covers proceeds of sale. Terms printed only on invoices may not be enough.
  2. Correct PPSR registration. Register before delivery, against a company’s ACN rather than its ABN. An unregistered interest generally vests in the customer on insolvency (PPSA s 267). A late registration can too (Corporations Act 2001 (Cth) s 588FL). See our guide to PPSR and retention of title.
  3. Personal guarantees. For material accounts, take properly signed guarantees from the directors.
  4. Searches. Search the PPSR before extending credit, to see who already holds security over the customer’s assets.

Warning signs

  • Payments slipping, part-payments, or requests for longer terms.
  • A request for a payment plan on an overdue account.
  • A tax debt on the customer’s credit report. The ATO may report tax debts of $100,000 or more overdue by more than 90 days, where the business is not engaging with it.
  • Statutory demands or winding-up applications by other creditors, or notices on ASIC’s published notices website.

Choosing the right recovery tool

Statutory demand. This suits a debt of at least $4,000 that is due and payable and not genuinely disputed. The company has 21 days to pay or apply to set the demand aside. If it does neither, it is presumed insolvent, and the creditor has three months to apply to wind it up. Serving a demand for a disputed debt risks a costs order. See statutory demands.

Court proceedings. For a disputed debt, sue for it. See debt recovery.

Guarantees. Demand payment from the guarantor. A bankruptcy notice requires a final judgment of at least $10,000, no more than six years old. The guarantor then has 21 days to comply. See personal guarantees and bankruptcy.

Payment plans. Put any plan in writing, and take security if you can. But payments from an insolvent customer can be clawed back. A liquidator may recover unfair preferences received in the six months before the relation-back day, unless a defence applies.

When an administrator or liquidator is appointed

  • Assert retention of title in writing at once. Identify the goods and ask that they be kept aside. Do not remove them without the administrator’s consent or the court’s leave (s 440B).
  • Keep supplying only on a written order. You cannot terminate a contract merely because the customer entered administration (s 451E). But you cannot be forced to extend new credit. Administrators are generally personally liable for goods and services they order (s 443A), although courts sometimes limit that liability.
  • Director guarantees. These cannot be enforced during the administration without the court’s leave (s 440J). A deed of company arrangement does not stop you recovering under the guarantee.
  • Vote. Lodge details of your debt with the administrator before each meeting. A company creditor must appoint a proxy. At the second meeting, usually about five weeks in, creditors decide the company’s future.
  • Prove your debt. In a liquidation, lodge a formal proof of debt with copies of invoices. The liquidator must give at least 14 days’ notice of the deadline before paying a dividend.
  • Set-off. In a liquidation, mutual debts are set off and only the balance is claimed or paid (s 553C). This does not apply if you knew the company was insolvent when the credit was given. Nor can it reduce an unfair preference claim (Metal Manufactures Pty Ltd v Morton [2023] HCA 1).

Creditors can also ask a liquidator for information, which must generally be provided within 20 business days.

What creditors should do now

  1. Review your terms of trade and PPSR registrations for your largest customers.
  2. Search the PPSR and ASIC records before extending further credit.
  3. Diary every deadline: 21 days, three months, and any proof of debt date.
  4. Keep invoices, statements and correspondence in order.
  5. Get advice before accepting a payment plan from a customer that may be insolvent.

What to watch

  • The Productivity Commission. Its interim report on business dynamism, which covers insolvency frameworks, is due in November 2026. Any change to creditors’ remedies is likely to follow from it. See Insolvency reform on hold.
  • The insolvency numbers. ASIC’s next monthly figures will show whether Queensland’s rise is continuing.
  • Bathla. If Bathla companies move into liquidation, suppliers paid in the six months before 25 August 2026 may face preference claims. See Seven weeks after Bathla.

To discuss how these developments affect you, contact us on +61 7 3229 9800 or send us an enquiry online.

This article is general information only and is not legal advice.

Sources: ASIC — Insolvency statistics, Series 1; ASIC — Protecting yourself when you supply goods and services on credit (INFO 194); ASIC — Voluntary administration: A guide for creditors (INFO 74); ASIC — Liquidation: A guide for creditors (INFO 45); AFSA — PPSR: Grantors; AFSA — Bankruptcy notice; ATO — Disclosure of business tax debts; Federal Court of Australia — Corporations Information Sheet 1: Winding up proceedings based on an unsatisfied statutory demand; Corporations Act 2001 (Cth), ss 440B, 440J, 443A, 451E, 459C, 459E, 459G, 553C, 588FA, 588FE, 588FL; Personal Property Securities Act 2009 (Cth), s 267; Hill, in the matter of Intergen Energy Holdings (Australia) Pty Ltd [2016] FCA 1585; Metal Manufactures Pty Ltd v Morton [2023] HCA 1; Productivity Commission — Reducing barriers to business dynamism.