On Friday 23rd January I was rushing to leave and go to a client appointment when a call came in from John, a customer who I saw in early December.
John has a business in Bibra Lake, Western Australia. John had been struggling and wanted some advice on how to further protect his business.
John had some Terms of Trade written by EC Credit Control in 2009 and had purchased some debt collection vouchers which he had previously lost. We were able to supply him with the numbers and some blank vouchers to use as our debt vouchers have no expiry date.
At the time I recommended John update his Terms of Trade to cover him for the new PPSA legislation and to also invest in some PPSR vouchers to let us do the registrations for him. Unfortunately things were a bit tough for John and he decided to wait and John did not protect his position on the PPSA.
On January 23rd John's call came with the words I hate to hear, one of his clients had gone into liquidation: “What can I do to get the $18,000 I am owed?”
Unfortunately in being honest I had to tell John the bad news, â€œwithout a PPSR Registration, not only could we not do anything about collecting his outstanding $18,000, but there was also the possibility of not only had he lost his outstanding $18,000, but there was the possibility that any monies he has been paid by this customer in the past 6 months, could be seen as a Preferential Payment, and that he might be liable for Preferential Payments Claw Back, which means he could lose any payments made by his client in the previous six months.
I really feel bad for John, but unfortunately, in this case without a PPSR Registration he really is out of options.