Tenbensel & Dee - Chartered Accountants

Information for creditors

General

The news of an insolvency administration often comes as a surprise to creditors and is generally received as bad news. This is understandable particularly where the creditor had little idea that the debtor was in financial difficulty.

However, there are positive aspects that creditors should consider:

The potential for larger losses resulting from continued trading and/or borrowings is avoided.
Any available assets will be realised and distributed in an orderly and equitable manner in accordance with prescribed rules.
An experienced insolvency practitioner will be appointed to take charge of the debtor’s affairs, make any necessary investigations and report to creditors.
In many administrations creditors will be involved in decision making processes.

It is recognised that the early involvement of an insolvency practitioner will generally increase the benefits to creditors

The rules relating to the insolvency of individuals are governed primarily by the Bankruptcy Act 1966 whilst the rules relating to the insolvency of companies are governed primarily by the Corporations Act 2001. Both acts provide for a variety of types of administration.

Early in each administration creditors will receive a circular with specific information relevant to the type of administration and the circumstances of the particular case.

The following links provide general information specific to particular types of administration:

Information for creditors – Part 5.3A Administrations	This information sheet in PDF format was developed jointly by ASIC (Australian Securities and Investment Commission) and the IPPA (Insolvency Practitioners Association of Australia). It provides information relating to Voluntary Administrations, the most common type of administration used in the corporate sector.
Information for creditors - Receiverships	This information sheet is also in PDF format and was developed jointly by ASIC and the IPPA. It provides information relating to Receiverships which are initiated by a secured creditor of a company.
Information for Creditors - Liquidations	This information sheet is also in PDF format and was developed jointly by ASIC and the IPPA. It provides creditors with information relating to company Liquidations.
Information for Creditors – Personal Insolvencies	This link points to a comprehensive set of web pages on the Insolvency Trustee Service of Australia (ITSA) web site. ITSA is a Federal Government agency.
ASIC has more information, including additional information sheets on its website. The following is a link to some of the information we send to creditors at the beginning of each administration we undertake.
Information for Creditors on Remuneration and Costs in Insolvency Administrations	This information provides details of the work typically undertaken in an insolvency administration, and includes details of the hourly rates charged by this firm.