Can I Claim Uncollected Money from My Insolvent Business After 7 Years?

Question from Hh, Can I Claim Uncollected Money from My Insolvent Business After 7 Years?

Answer from AI:

How Unclaimed Money Works after an Insolvency

When a business goes into insolvency, any money that remains undistributed can become “unclaimed.” In Australia, the rules that govern how long you have to claim that money and what steps you can take are set out in federal legislation and administered by the Australian Securities and Investments Commission (ASIC).

Relevant Time Limits

• Limitation Act 1985 (Cth) – Generally limits the period for bringing a claim against an insolvent company to 6 years from the date the cause of action arose.
• Insolvency Act 1986 (Cth) – Gives the liquidator a duty to identify and distribute any surplus assets to creditors or shareholders. If surplus funds were not distributed before the liquidator’s final account, they may still be held for claimants.

Because your situation is more than 7 years after the insolvency, the standard limitation period may have expired. However, the law also provides mechanisms for dealing with unclaimed money that remains in the hands of the liquidator or ASIC.

Where to Look for the Money

1. ASIC’s Unclaimed Money Register – ASIC maintains a searchable database of money held on behalf of former company owners, directors, and creditors.
   You can search the register using the company name or your personal details.
2. Contact the Insolvency Practitioner – The liquidator or administrator who handled the winding‑up should have records of any surplus. Even after the formal liquidation, they may retain the funds for a statutory period.
3. Court Orders – In rare cases, a court can be asked to order the distribution of unclaimed funds, especially if the liquidator cannot be located or the assets were never identified.

Steps to Take

1. Search the ASIC Register – Go to the ASIC website and use the “Unclaimed Money” search tool.
2. Gather Documentation – Prepare any evidence that shows your entitlement, such as:
   • Company registration documents
   • Shareholder or creditor agreements
   • Invoices, contracts, or correspondence showing the amount owed
3. Contact the Former Liquidator – If you know the name of the liquidator, reach out to request a copy of the final account and any remaining surplus.
4. Consider Legal Advice – Because the limitation period may have passed, a solicitor or qualified insolvency practitioner can advise whether an exception applies (e.g., if the liquidator failed to disclose the surplus) and whether a court application is viable.

Key Points to Remember

• Statutory time limits usually bar claims after 6 years, but unclaimed money held by ASIC can still be recovered.
• Liquidators have a continuing duty to hold surplus assets for a reasonable period, even after the liquidation is finalised.
• Proof of entitlement is essential; without documentation, it can be difficult to prove you are the rightful claimant.
• Professional advice is strongly recommended to navigate any potential court proceedings or to confirm whether the money is still recoverable.

Useful Resources

• ASIC Unclaimed Money Register – Search for any balances held on your behalf.
• Federal Register of Legislation – Limitation Act 1985 (Cth) – Full text of the limitation provisions.

If you suspect that unclaimed funds remain, start with the ASIC register and gather any supporting paperwork. Because the legal landscape can be nuanced, especially after a long lapse of time, consulting a qualified lawyer or insolvency specialist will help you understand the best course of action for your particular circumstances.