What does voluntary administration mean for creditors?

What does voluntary administration mean?

Someone independent takes control of the company while they work out whether it can be saved.

If you are owed money, you are a creditor. What you are owed stops being a debt you can chase and becomes a claim inside a formal process, and that process decides what happens to it. Nobody can promise you will be paid. ASIC creditor guide.

The practical effect is that the timetable stops being yours.

Can I keep chasing payment?

Generally not in the ordinary way, so stop before you spend money on it.

Unsecured creditors usually need the administrator’s consent or the court’s permission to start, continue or enforce a claim. ASIC guidance.

If you already have proceedings running, hold security, or have rights over property or goods on site, get advice on your specific position first. Carrying on as though nothing has changed is the expensive option.

What happens at creditors’ meetings?

The first one is mostly procedural: confirming the appointment and deciding whether to form a committee of creditors.

The second is the one that matters. That is where the company’s future is decided, and there are three ways it can go: back to the directors, into a deed of company arrangement, or into liquidation.

Dates move. Courts grant extensions and timetables shift, so work from the current notices rather than something you read a fortnight ago. ASIC guidance.

What is a proof of debt?

It is the formal record of what you say you are owed.

Follow the administrator’s own instructions for what evidence to attach and what voting or proxy paperwork goes with it. Lodging one does not guarantee you will be paid, and being accepted for voting is not the same as being paid a dividend. ASIC guidance.

What should I prepare?

One folder, and a couple of hours. Contract, invoices, a reconciliation of what has actually been paid, evidence the work was done or the goods delivered, variations, retentions and the correspondence about the account. Put anything disputed, and any security you hold, on separate notes.

The thing most people get wrong: check the legal company name on your paperwork. A trading name or a group name often will not identify who actually owes you, and a claim against the wrong entity is a claim against nobody.

Keep a dated copy of whatever you send and whatever comes back. Formal claims go through the administrator’s own channel. You cannot lodge one by ringing us.

What if my customer is Bathla?

Use our Bathla Group administration information to find the official portal, dated updates and a supplier checklist. Check later notices for your contracting company.

What if this affects my own payments?

Then that is the more urgent problem, and it is the one you can still act on.

And for the customers who have not collapsed, security of payment is worth far more now than it will be later.

The claim runs on the administration’s clock. Your wages, suppliers and tax do not. Work out how many weeks you can operate on income you are genuinely confident of, counting nothing from the failed customer.

Read about the pressure an unpaid debt puts on your own business. These pages are general information and do not settle your legal or financial position.