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Protect your interest as a creditor before it is too late!

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It is no surprise that businesses are struggling during these difficult and challenging times, with many having to close up shop under government direction or due to a lack of business.


In response to this, the Australian Government has made temporary amendments to the insolvency and debt recovery laws to avoid or defer the looming threat of insolvencies and bankruptcies faced by many of these businesses.

This means that recovery of debts will rely largely on the goodwill of your customer base, as many of the tools you have to enforce recovery have been stripped away. Even in this environment, where the government is doing its best to pause the economy, many business owners will simply not see the light at the end of the tunnel and choose to enter into liquidation or some other form of insolvency administration.

You therefore need to look at the terms upon which you are supplying goods, what credit is being provided, what security you have, and whether you retain title to goods supplied until they are paid for.

Without effective security in place, you are putting your business at substantial risk.

What should you do?

You should act now to:

  1. review your credit terms to ensure they contain an appropriate retention of title clause to protect your title to the goods and a security clause to enable registration of your interest in goods on the Personal Property Securities Register (PPSR); and
  2. register your security interest on the PPSR. Your security interest must be registered within the timeframe specified under the Act (in essence, before the goods are provided).

If you do not register your retention of title arrangements on the PPSR, and your customer enters into insolvency administration, you will lose title to your goods and your chances of being paid (at all) will be extremely limited.

If you currently do not have any credit terms and conditions in place, or these do not contain provisions with respect to retention of title or security, please get in touch with us as soon as possible.

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