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What should I do if a client who owes me money goes into liquidation?

Short answer

Stop chasing the customer directly. If a company is in liquidation or administration, contact the appointed liquidator or administrator, lodge a proof of debt when asked, and read ASIC's creditor information. If an individual is bankrupt, deal with their trustee via AFSA. Recovery is often partial or nil, so speak to your accountant about writing off the debt.

General information only, not legal or financial advice. Every business and every debt is different. For advice on your situation, talk to a lawyer, your accountant or your state small business commissioner.

Step by step

  1. 1

    Confirm the appointment

    Check ASIC's published notices or AFSA's register.

  2. 2

    Contact the liquidator, administrator or trustee

    Their details are on the notices.

  3. 3

    Lodge a proof of debt

    Include invoices and statements.

  4. 4

    Check for any retention of title rights

    If your terms included it and it was properly registered, get advice quickly.

  5. 5

    Consider the tax treatment

    Talk to your accountant about bad debt deductions and GST adjustments.

What else to know

Once a formal insolvency starts, your right to pursue the debtor directly is usually limited. Creditors can often attend meetings and vote.

ARITA, the industry body for insolvency professionals, also publishes plain English information for creditors.

Insolvency resources in the directory

Common questions

Will I get my money back?

Sometimes partly, often not. It depends on the assets available and where you rank among creditors.

Can I keep chasing the director personally?

Usually only if they gave a personal guarantee or another specific legal basis exists. Get advice.

Official sources

Sources checked 14 October 2026. Rules and limits change, so check the official site before acting.

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