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External Administration: Do you owe money to a company?


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If you are a customer and have outstanding bills owed to a company, you are a debtor of the company.

When a company is placed into liquidation or voluntary administration, the Liquidator/Administrator will issue a debtor demand letter to the debtor based on the outstanding amount in the books and records of the company available to them. In most instances, this demand letter will also include invoices which the debtor can refer to and reconcile back to their own records.

Debtors are encouraged to make payment as soon as possible or contact the Administrator if there are any genuine issues with the amount due before further actions are taken by the Administrator, such as engaging external debt collection or even liquidating / bankrupting the debtor.

Genuine issues may arise where the records of the company may not have accounted for the most recent payments the debtor made in the period leading up to the appointment of the Administrator. Alternatively, the records of the company may not be updated to reflect any agreements made between you and the company post the date the sale transaction was entered.

In these circumstances, the debtor may find that the amount the Administrator has demanded payment for does not match what the debtor believes is owed the company. If there is a genuine reason for the difference, the debtor is required to provide supporting proof for the difference. Examples of supporting documents include:

  • Evidence of payments previously made, including remittance advices;
  • Written evidence of any agreements made or waivers authorised by the company; and
  • Any other supporting documentation.


How we can help

If you, or your clients, receive a demand for payment that you are unable to pay, Vincents’ Registered Liquidators can discuss with your options to try to save your business or have it wound down in an orderly way.

An Important Message

While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents.  Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.

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