What happens when a business owes you money but is insolvent?
Can you get your money back? What are your options and procedures?
You should be aware of late payments and your debtor’s situation before they get to an insolvent stage, so you can negotiate directly and have a better chance of recovering money owed to you. A business can be restructured and undergo a turnaround plan.
However, if they are already under administration, which will eventually happen when a business becomes insolvent, you may or may not get your money back depending on the circumstances and how many creditors there are. ASIC has some advice on what to do if you are dealing with an insolvent business.