For directors facing voluntary administration, one question comes to mind: “Are my personal assets at risk?”
TL;DR: Entering voluntary administration (VA) does not automatically mean losing personal assets. Most enforcement is paused while the administrator assesses the business and explores options, such as a Deed of Company Arrangement (DOCA).
However, personal guarantees, Director Penalty Notices (DPNs), and past transactions can put personal wealth at risk.
The best way to protect personal assets is to cooperate with the administrator, disclose all relevant information, and seek advice early.
When Personal Assets Are at Risk
Directors often worry that VA puts their house, savings, and/or family assets at immediate risk.
Personal guarantees
The most common threat to personal assets is a personal guarantee. These are often linked to:
- Bank loans
- Equipment finance
- Commercial leases
- Supplier accounts
If the company cannot pay its debts, the creditor may pursue the director personally for repayment. Key risks include enforcement against personal assets, such as the family home, if it has been offered as security.
ATO debt and director liability
The ATO can also create personal exposure through DPNs for unpaid PAYG withholding and superannuation guarantee. Failure to address DPNs can make the director personally liable for these debts.
In extreme cases, the ATO may seek a Departure Prohibition Order (DPO), which can stop a director from leaving Australia until the tax debt is addressed.
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Past transactions and director conduct
Directors also face risk from related-party transactions that raise questions, unpaid director loans, or actions leading to insolvent trading claims.
These issues often come under scrutiny once an external appointment begins and the administrator takes control of the company to investigate its position.
How to Protect Personal Assets
Most creditor enforcement is paused while the administrator reviews the business and considers whether a DOCA could produce a better outcome than liquidation.
This breathing space allows the administrator to negotiate with key creditors and work towards terms that reduce the risk of guarantee enforcement.
Directors should use this window to:
1. Cooperate with the administrator
Provide books, records, and explanations promptly. Delays, gaps, or defensive behaviour increase suspicion, add costs, and reduce the chances of a workable outcome.
2. Map your personal exposure
List every personal guarantee and liability, including:
- Bank facilities
- Lease guarantees
- Secured loans
- Any ATO exposure linked to DPNs
This helps identify which creditors need urgent attention.
3. Stop mixing personal and company funds
Keep personal and business finances separate. If money has moved between you and the company, disclose it early and get advice before making further changes.
Transactions made before VA can be examined closely and, in some cases, clawed back to repay creditors.
4. Stay compliant and transparent
Continue acting properly, honestly, and in creditors’ interests. Cooperation reduces the risk of personal liability claims later.
Common Questions about Protecting Personal Assets
Can creditors take my house during voluntary administration?
Creditors cannot immediately enforce a personal guarantee — their rights are suspended during the VA. However, if you have provided a personal guarantee or property as security, those creditors may pursue you personally after the VA ends.
Does voluntary administration stop ATO action?
VA pauses most enforcement actions against the company, but personal liabilities, such as lockdown DPNs, can still affect directors.
Can a DOCA protect personal assets?
In many cases, yes. A well-structured DOCA may reduce company debt and lower the pressure on creditors to enforce guarantees.
Avoid Leaving Personal Assets at Risk During VA
Voluntary administration does not automatically strip directors of their personal assets. However, guarantees, ATO liabilities, and past transactions can create exposure.
The earlier you seek advice and the more effectively you cooperate with the administrator, the greater the opportunities to protect personal assets and improve the outcome for the business and your family.
If your company is under financial pressure, speak to an insolvency practitioner as early as possible.
