You’ve done the work. Sent the invoice. Followed up.
And now your client’s gone quiet—or worse, they’ve shut their doors completely.

If a company owes you money and suddenly becomes insolvent, it’s easy to feel like you’ve hit a dead end. But the truth is, while recovering debt from an insolvent company isn’t easy, it’s not impossible—especially if you know what steps to take and when to act.

At JMA Credit Control, we’ve got over 50 years of experience in helping Australian businesses get back what they’re owed, even in the trickiest of situations. Here’s what you need to know.

What does it actually mean if a company is insolvent?

Insolvency just means a business can’t pay its bills when they’re due.

This could happen suddenly, like a construction company that shuts down mid-project due to unpaid tax bills, or it could be a slow burn where late payments pile up until the business just can’t keep going.

Once that happens, the business might go into:

• Voluntary administration – where an external administrator steps in to try and save the company or work out a plan with creditors.
• Liquidation – where the business shuts down and its assets are sold off to pay back debts.
• Receivership – where a secured creditor (usually a bank) appoints someone to recover what they’re owed.

If you’re waiting on payment, this is the moment you need to act—because once administrators or liquidators take over, creditors are put in a queue, and unsecured ones (like most suppliers or service providers) are usually at the back.

“I’m just a supplier—do I even stand a chance of getting paid?”

It depends, but yes—sometimes you can recover part or even all of what you’re owed.

Let’s say you’re a wholesale food supplier and a café you deliver to has gone into voluntary administration. If you move quickly, you may be able to:

• Submit a formal claim as a creditor
• Try to negotiate a partial settlement
• Enforce a personal guarantee from the café owner (if one exists)
• Take legal steps—like issuing a statutory demand if the company’s still technically operating

It all comes down to how far along they are in the insolvency process, what kind of agreement you had in place, and whether any personal guarantees were signed.

What are your options as a creditor?

Here’s a breakdown of the tools you can use when a business owes you money—even if it’s struggling:

1. Send a letter of demand

This is the formal version of a final warning. It outlines how much is owed, what it’s for, and gives the debtor a deadline to pay. It can be enough to prompt action, especially if the company is still operating.

2. Issue a statutory demand

If the debt is over $4,000 and the company is still solvent (or claiming to be), you can issue a statutory demand. This gives them 21 days to pay or dispute it. If they ignore it, you can apply to wind up the company.

This option should be used carefully – it’s powerful, but it’s a legal process, so we recommend speaking to a professional first.

3. Check for personal guarantees

Did the company director personally guarantee the debt when they opened an account with you? If so, you may be able to pursue them directly, even if the company itself is out of money.

4. Engage a debt collection agency

If you’re sick of chasing and getting nowhere, a professional debt collector can handle the hard stuff—letters, calls, negotiations, and even legal escalation if needed.

What if the company’s already in liquidation?

This is where things get tough—but not necessarily hopeless.

Once a company is in liquidation, a registered liquidator takes over. Their job is to sell off the company’s assets and distribute the money to creditors. But not all creditors are treated equally.

Here’s how the priority list usually goes:

1. Secured creditors (like banks with mortgages or equipment finance)
2. Employees (unpaid wages and super)
3. Unsecured creditors (like suppliers and contractors)

If you’re an unsecured creditor, your best move is to file a proof of debt with the liquidator as soon as possible. You may only get a percentage of what you’re owed—but it’s better than nothing.

For example: “They owe me $10,000. Is it worth chasing?”

Let’s say you’re a marketing consultant and a startup you worked with just went under. They owe you $10K, and you’ve heard they’ve entered liquidation.

You might assume it’s game over—but:

• If you have a signed contract and can prove the work was completed, you may be able to claim a portion back through the liquidator.
• If the founder personally guaranteed the contract, you may be able to recover the debt from them, not the business.
• If you act quickly and engage a debt collector, you might even recover it before the company is fully wound up.

Moral of the story: don’t assume the money’s gone until you’ve looked at your options.

Why work with a debt collection agency like JMA?

We get it—debt recovery is time-consuming, emotionally draining, and full of legal landmines. That’s where we come in.

At JMA Credit Control, we:

• Act fast to preserve your position in the recovery process
• Send professional letters of demand that actually get attention
• Negotiate on your behalf, saving you time and stress
• Pursue directors personally where a guarantee exists
• Work on a no recovery, no commission basis in most cases

And when legal escalation is needed, we coordinate with our in-house legal experts or external specialists to get things moving—without racking up massive legal bills.

Don’t wait too long

One of the biggest mistakes we see? Waiting too long to act.

Once a company’s assets are gone, your chances of recovery drop fast. Even worse, if you miss certain legal deadlines (like the 21-day response window for a statutory demand), you could lose your right to take action altogether.

If a company owes you money and things seem off—don’t wait. Talk to someone who knows what to do.

Let JMA Credit Control help you get paid

Whether your debtor’s just gone quiet or has officially entered liquidation, we can help you understand your options and take action.

We’ve been helping Australian businesses recover debts for a long time and we know how to get results, even when things get complicated.

Let’s talk about how we can help.
Contact us today for a no-obligation chat.