Considerable care should go into the structure and layout detail of your company “Credit Account Application and Agreement” and “Applicant’s Guarantee”, as poorly prepared credit control may result in future bad debt and inability to recover. The same applies to poor office procedure and control for inspection of returned applications, as selective filling out of detail by the applicant can result in the loss of future debt recovery. This information sheet is not personal advice, simply a discussion paper.

We had a client case recently for the recovery of an outstanding debt that the company debtor was unable or unwilling to work towards resolving. A detailed application and applicant guarantee was signed by the sole director a few years earlier.

One of the required questions in the application is whether the applicant director owns his home or rents. In this case the director stated he did own his home. A director’s guarantee without a suitable asset base such as a home provides little comfort in recovering a debt if the director has all his assets in the company, especially in the case like this where the company goes into receivership.

We were feeling confident in recovering this debt from the director since we assumed he owns his home with his wife and if it became necessary we would enforce the sale of his share in the residential property. We proceeded to do an ASIC Property title search to confirm title ownership prior to issuing legal proceeding through the Magistrates’ Court. Unfortunately, the sole director had no property ownership; his wife had the sole ownership of this property.

This position required us to look at the alternative asset options that the director may have and the first option we looked at was for alternative property ownership. This director’s name included his middle name, which helped in our ASIC Property Title name search. We were lucky this time in identifying a secondary property owned by this director. If he had not used his middle name we would have found it more difficult and costly in identifying his ownership.

At $56.60, an ASIC Property Title Search is money well spent to confirm whether a director owns the title to their own home, when indicated as such on application. We find a large number of directors simply tick the “Ownership” square and think little about the deception of ownership, since they live in their house with their wife.

We recommend that businesses have a company Credit Control classifications that provide for three credit risk classifications, such as good, medium or poor.

Each of these classifications should have their own selection criteria and business policy. A good or excellent customer would be one whom has property title ownership (confirmed by ASIC search) of the home and offers a personal guarantee on the payment of all sums of money which shall from time to time fall payable and due by the company.

Brodie Collection Services is one of Australia’s leading debt collection firms, with offices in Melbourne and Brisbane. They can provide ASIC search services from a low $46.50. They also provide debt collection services on a no collection, no charge basis. You can trust them with all your debt recovery needs. Visit to find out more about the debt collector services that are offered by Brodie Collection Services or call us on 1300 276 343.

This information provides a general summary only and is not intended to provide specific advice for your individual circumstances. It is not a substitute for professional advice and should not be relied upon as such.