The text, the missed call, then the ASIC notice. Your builder’s gone into liquidation and you’re owed for finished work. You can’t un-ring that bell, but what you do in the next two weeks decides how much of the hole you can climb out of, and whether your own wages and supplier accounts survive it.
Construction was the most common industry for company insolvencies in 2025–26, at 24.4% of appointments from 1 July 2025 to 31 May 2026 (ASIC). Subbies are rarely the ones who caused it, and they’re nearly always the ones holding the unpaid invoices. Here’s the foreman’s version of what to do.
What does “unsecured creditor” actually mean for a subbie?
It means you’ve got no security over the builder’s assets. ASIC describes an unsecured creditor as one without a security interest over the company’s assets, as opposed to a bank with a mortgage (ASIC).
In a liquidation, funds are generally paid out in this order (ASIC’s creditor guide):
- Costs and expenses of the liquidation, including the liquidator’s fees
- Outstanding employee wages and super
- Outstanding employee leave entitlements
- Retrenchment pay
- Unsecured creditors, which is where you sit
Each rung is paid in full before the next one sees a cent. Secured creditors, such as a lender with a mortgage, are dealt with against their own security. In a lot of small builder collapses there’s nothing left by the time the list reaches rung five. That’s why the real plan isn’t “wait for the liquidator”. It’s “check every other route to the money, and protect the business while you do”.
Liquidation, administration or receivership: which one is it?
AI answers and forum posts blur these together, and it matters. Check the ASIC notice or the liquidator’s letter for the exact wording.
| Type | What it means | What it means for you |
|---|---|---|
| Liquidation | The company is being wound up, assets sold, proceeds shared by the legal order | Lodge a proof of debt; most actions against the company need the liquidator’s or court’s say-so |
| Voluntary administration | A short pause while an administrator decides if the company can be saved | Creditors vote; your claim may survive a deal of arrangement |
| Receivership | A secured lender’s receiver recovers what that lender is owed | Usually bad news for unsecured creditors: the lender comes first |
You can search the company on the ASIC Published Notices site to see the type of appointment and who the liquidator or administrator is.
What should I do in the first 14 days?
Work this list in order. Most of the cost of getting it wrong is a missed deadline.
Days 1 to 3: stop the bleeding and gather proof
- Stop work and stop buying on credit for that job or that builder until you know where you stand.
- Pull every document: quote, contract, variations, progress claims, tax invoices, delivery dockets, photos, emails and texts that confirm the work was done and approved.
- Write down the dates. The date of each claim, the date the work finished and the date of practical completion on the job. Some state deadlines run from these.
- Don’t sign anything on the spot. Directors sometimes ring subbies with a promise to pay part of the debt. Get it in writing, and have it checked before you give up any other right.
Days 3 to 7: lodge the proof of debt
The liquidator will send a proof of debt form. ASIC says to attach invoices or other supporting documents because a claim can be rejected for insufficient evidence, and that if a claim is rejected the liquidator must tell you within seven days and give reasons (ASIC). If a company is the creditor, someone authorised by that company must sign it. Lodging doesn’t guarantee a payout, but not lodging guarantees you don’t get one.
ASIC also says the liquidator has to report to creditors within three months of appointment, covering likely assets and liabilities and the chance of a dividend. That report is your first honest look at whether there’s anything to wait for.
Days 5 to 14: check the route that bypasses the builder
This is the step most subbies skip, and the one that can matter most. If the client or head contractor above the builder still owes the builder money, that money may be reachable. The tools differ by state, and the deadlines are short.
Can I claim from the client above the builder?
In some states, yes, if the right notice goes in on time. Queensland is the clearest example because the regulator publishes the steps.
Queensland subcontractors’ charge. The QBCC says a subcontractor can lodge a charge that attaches to money owed higher up the chain, and it can also secure retention money (QBCC). The key points:
| Item | What QBCC says |
|---|---|
| Time limit for money owed | No later than three months after completion of the work |
| Time limit for retention | Within three months after the end of the defects liability period |
| First step | A notice of claim (Form S122) to the contractor and the person higher in the chain |
| Response | The contractor has 10 business days to respond (Form S128) |
| If disputed | Start court proceedings within one month of the notice being first given |
| Limits | Doesn’t apply to domestic building work; only bites if the higher party still owes the contractor money; can’t run alongside adjudication for the same dispute |
QBCC adds that the process is technical and minor errors can invalidate a claim, so get legal advice before lodging.
NSW and Victoria. Both states have routes for a subbie to go after the principal when a head contractor fails to pay, but they’re built on different Acts and generally follow a successful payment claim process first. NSW has the Contractors Debts Act, and Victoria’s Security of Payment Act allows a notice of claim on the principal. Details and time limits differ and have changed, so check with NSW Fair Trading or the Victorian Building and Plumbing Commission and a construction lawyer before assuming anything.
Other states. Charges and notices vary in strength. Check your state’s building regulator.
A practical point: all of these routes only work while the client still holds money. Once the client has paid the builder, or a PC payment is made, the window closes. That’s why 14 days, not 14 weeks.
What about adjudication against a builder in liquidation?
Be careful here. Security of payment adjudication is quick when the other side is solvent. Against a company already in liquidation it is a different game. Legal commentary on this is mixed, and some state Acts expressly deal with companies in liquidation, mostly from the claimant’s side. A determination against a company in liquidation generally can’t be enforced like an ordinary debt, because the Corporations Act puts the liquidator in control of how creditors are paid.
So don’t burn money on an adjudication application until a construction lawyer tells you it can do something for you. Our guide on security of payment claims and cash flow covers how adjudication works when the builder is still trading.
Example: a two person plastering crew in Ipswich
An invented example with round numbers. A two person plastering crew finishes a job for a builder on a $60k contract. They’ve been paid $20k. The builder goes into liquidation the week the last $40k is due.
- Day 2: the owner pulls the contract, claims and photos and emails the liquidator to confirm the proof of debt form is coming.
- Day 4: she checks when the job reached completion. It was nine days ago, so she’s inside the three month window for a Queensland charge.
- Day 5: a construction lawyer confirms the client still holds money the builder is owed. A notice of claim goes out the same day.
- Day 6: the crew’s own bills are the next problem: wages on Friday, plus a supplier account due at the end of the month. That’s $18k of cash going out in the next three weeks against nothing coming in.
The charge might recover most of the $40k, but not quickly. A business that can’t fund the next three weeks may not still be around to collect it. That’s where the funding conversation comes in. If you’re in that spot now, check your options here while you chase the money.
How do I keep my own business going while the money is stuck?
Work out three numbers on a single page:
- The hole: the total owed, split into what’s realistically recoverable (a charge or notice on money the client still holds), what’s a long shot (the liquidator’s dividend) and what’s gone.
- The runway: how many weeks of wages, super, supplier terms and ute payments you can cover without that money.
- The gap: runway minus the date you realistically expect cash to arrive.
Then use the cheapest levers first:
- Ring your suppliers before they ring you. A call that says “my builder went into liquidation, here’s my plan” gets more patience than silence.
- Re-price new work. Take progress payments in tighter stages and don’t carry a single builder for more than a couple of claims. See progress payments and cash flow gaps.
- Talk to your accountant about how the unrecoverable part is treated for tax and GST, so you don’t also overpay the ATO on money you never received.
- Look at funding for the gap, not the debt. A loan won’t make the liquidator pay you faster. What it can do is carry wages and supplier bills so the business is still standing when a charge or dividend finally comes through.
If you own a home, an investment property or land with equity, a property secured loan may be an option. Those loans need no financials, consider bad credit and ATO debts, and can fund in as little as 24 hours once valuation and documents are in. You can work out your usable equity with the construction equity calculator. No property? Cash flow loans for tradies are unsecured, based on your business bank statements, and suit businesses trading 6+ months with an ABN. Our subcontractor finance page covers the subbie angle in more detail. All lending is subject to approval.
Whatever you choose, plan the way out before you borrow. Our exit strategy guide walks through how builders map the repayment.
Mistakes that cost subbies the most
- Missing a charge or notice deadline by a few days while waiting for the liquidator to “sort it out”.
- Going back on site on credit because the client promises it’ll be fine this time.
- Lodging a thin proof of debt with a single invoice and no evidence the work was done.
- Ignoring your own wages and super while chasing the old debt. They’re the first things that will hurt you.
- Taking advice from the pub. Charge and notice rules are technical, and small mistakes can sink a claim.
Need to keep the crew paid while you chase the money?
A builder going under shouldn’t take your business with it. If you’ve got a gap to cover while the charge, the client or the liquidator catches up, we can have a look at it with you. Enquiring takes about 60 seconds, and your credit file isn’t touched just for asking. Your details go to one lending specialist, not a pile of lenders, so your phone won’t be ringing off the hook. A real person who understands building reads your situation and calls you back.
One favour: fill the form in accurately. What you need, what it’s for, the property value and what’s owed on it. That’s how we line up the right option first time, rather than the third.
