The liquidator says you owe the company money. Do you?

Why the balance matters

When liquidation starts, a director loan account can suddenly matter more than any trade debt. If you have taken drawings from the company, the liquidator may treat the balance as money owed back to the company, not a loose bookkeeping entry. ASIC says a director can remain responsible for debts owed to the company, including a loan received from it. ([download.asic.gov.au](https://download.asic.gov.au/media/ms5jigci/personal-bankruptcy-and-liquidation-of-a-company.pdf?utm_source=openai))

That matters because a disputed loan account can affect the whole winding up. If the figure is wrong, you may overpay. If it is right, silence can make the debt harder to manage. The liquidator's job is to collect and preserve value for creditors, so you need records, not guesses. ([asic.gov.au](https://www.asic.gov.au/for-business-and-companies/companies/company-deregistration-and-winding-up/wind-up-an-insolvent-company?utm_source=openai))

Start with the company ledger

Start with the director loan account in the accounts, not with memory. Look at the general ledger, journal entries, bank transfers and any loan agreement. ASIC's liquidation guidance says directors must help the liquidator and provide information about the company's affairs, and the external administrator must keep proper books available for inspection. ([download.asic.gov.au](https://download.asic.gov.au/media/ms5jigci/personal-bankruptcy-and-liquidation-of-a-company.pdf?utm_source=openai))

If the balance comes from drawings, company-paid personal expenses or cash withdrawals, note each item separately. Some entries may already have been repaid or offset through wages, expense reimbursements or capital contributions. Your first task is not to argue the law. It is to rebuild the account from the source documents so you can see the real number. ([legislation.gov.au](https://www.legislation.gov.au/C2004A00818/2026-07-01/2026-07-01/text/original/epub/OEBPS/document_7/document_7.html?utm_source=openai))

Source: Official guidance

Build the paper trail

Then collect every record that shows money going the other way. That includes loan advances you made to the company, bank transfers, unpaid expense claims, petrol or materials you covered personally, and any director resolution or email discussing repayment. If the account is overdrawn, these documents may reduce the balance or show that part of the figure is wrong. ([download.asic.gov.au](https://download.asic.gov.au/media/ms5jigci/personal-bankruptcy-and-liquidation-of-a-company.pdf?utm_source=openai))

Do not rely only on the annual accounts if you can find earlier management reports or statement of position documents. A liquidator will usually want a paper trail that links each transfer to a purpose. The stronger your file, the easier it is to separate genuine company borrowing from a private draw you still need to explain. ([asic.gov.au](https://www.asic.gov.au/for-business-and-companies/companies/company-deregistration-and-winding-up/wind-up-an-insolvent-company?utm_source=openai))

Reply in writing

When the liquidator contacts you, answer in writing and keep the tone factual. Say what you accept, what you dispute and why. List the documents you hold, the documents you still need, and any dates or amounts you cannot yet confirm. A calm written reply creates a record and stops the matter turning into an argument about memory. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors/liquidation-a-guide-for-creditors?utm_source=openai))

If you disagree with the balance, ask for the ledger extract and the calculation. If you accept some of it, say so and identify the parts still under review. This is the point to be precise, not defensive. The liquidator is administering the company for creditors, so clear disclosure helps everyone work from the same numbers. ([asic.gov.au](https://www.asic.gov.au/for-business-and-companies/companies/company-deregistration-and-winding-up/wind-up-an-insolvent-company?utm_source=openai))

Settle or challenge the figure

If the amount is correct, talk about how to deal with it rather than pretending it does not exist. You may be able to negotiate timing or a staged repayment, especially if you can show what funds are available and what other claims must be met. The key is to offer something realistic, not a promise built on hope. ([download.asic.gov.au](https://download.asic.gov.au/media/ms5jigci/personal-bankruptcy-and-liquidation-of-a-company.pdf?utm_source=openai))

If the amount is not correct, keep pushing back with documents until the figure is fixed. Either way, do not leave the matter sitting in an inbox. Check the loan account today, gather proof of your contributions, send a written response, and then get insolvency advice. If you need coordinated support, call CRP today about insolvency services. This is general information only, not legal advice. ([legislation.gov.au](https://www.legislation.gov.au/C2004A00818/2026-07-01/2026-07-01/text/original/epub/OEBPS/document_7/document_7.html?utm_source=openai))