When Lockdown DPNs Get Personal
Lockdown DPN's place immediate personal liability on your company's unpaid debts.
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Deceased Estates
Handle deceased estates with precision and empathy.
A deceased estate refers to all of the property, assets, liabilities and debts belonging to the person when they died. A Will provides instructions on how they would like their deceased estate to be distributed and is managed by a nominated executor.
A trustee is appointed in a deceased estate when the executer realises that the estate is bankrupt and then will appoint the trustee to manage the estate.
Here's how this typically unfolds:
Existing Bankruptcy: If the individual was already declared bankrupt and under the management of a bankruptcy trustee at the time of their death, the same trustee usually continues to manage the bankruptcy estate. This process includes settling the deceased's debts according to bankruptcy laws.
Insolvent Estate: If the deceased was not formally bankrupt but their estate is insolvent (meaning the liabilities exceed the assets and there is insufficient estate property to cover the debts), the executor or administrator of the estate might seek the appointment of a bankruptcy trustee. This is usually done through an application to the court or directly via a bankruptcy service.
Managing a deceased estate is a complex, sensitive process.
Here’s why families and beneficiaries choose TTJ Advisory:
Experienced Guidance
With deep expertise, we handle estates with professionalism and care.
Ethical and Fair Approach
We honour both the legal and personal wishes outlined in the will.
Clear Communication
We keep all parties informed, providing transparent updates throughout the process.
Compassionate Service
We approach every case with empathy, understanding the emotional challenges involved.
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Director Penalty Notices (DPNs) can have serious financial consequences, holding directors personally liable for unpaid company tax debts. This eBook explains how to respond, and strategies to protect your assets.
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What if the company can’t pay debts to creditors?In this case, you may need a Voluntary Administrator (VA) or a Small Business Restructuring (SBR) practitioner. TTJ Advisory can help by: Identifying tax debts tied to director penalties, Negotiating with creditors for debt compromises, Generating working capital through restructuring to address outstanding debts, and Sourcing funding through future profits, personal contributions, or third-party funds. This proactive approach gives you a structured plan to manage debts while preserving the company's ability to operate.
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Is liquidation necessary if i can’t pay the debts?In cases where there is no chance of recovery, commencing liquidation will stop the clock on the DPN and help directors avoid personal liability under certain circumstances. Our in house liquidator will assist you through the process.
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I have been issued a lockdown DPN - what do I do next?Lockdown Director Penalty Notices (DPNs) are issued to directors when a company fails to submit its business activity statements (BAS), instalment activity statements, or superannuation guarantee statements within three months of the due date. Once a lockdown DPN is issued, the penalty becomes fixed, meaning the director is personally liable for the unpaid debt. This liability cannot be removed or cancelled through any other means except by paying off the debt in full. Placing the company into voluntary administration or liquidation will not extinguish this personal liability.
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What are your options once you receive a lockdown DPN?Pay the Debt in Full: The most direct and essential option is to pay off the company’s tax debt in full. This is the only way to clear the liability imposed by a Lockdown DPN. Personal Insolvency Agreement (PIA): This is a legally binding agreement where the director makes a proposal to creditors (such as the ATO) to settle the debts over time or partially. A PIA allows the director to avoid bankruptcy, but it requires the appointment of a bankruptcy trustee to manage the agreement. The trustee will take control of the director's assets and administer the terms of the agreement, including negotiating with creditors. Bankruptcy: If the director is unable to pay the debt or arrange a PIA, declaring bankruptcy may be the final option. In this case, a bankruptcy trustee is appointed to manage the director’s assets and debts. The trustee will oversee the liquidation of assets to pay off the debts and handle communications with creditors, including the ATO.
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How are creditor payments prioritised in liquidation?Payments follow a set order, prioritising employee entitlements and secured creditors before other unsecured debts. Unsecured creditors can file claims and receive distributions based on available funds and the priority order.
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Frequently Asked Questions
How TTJ Advisory Assists with Deceased Estates
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Asset Protection and Management
We secure and carefully manage all estate assets, ensuring they are handled in line with the will’s instructions and legal standards.
02
Debt Settlement and Claim Resolution
TTJ Advisory handles all outstanding debts and legal claims, providing clarity and fairness to both creditors and beneficiaries.
Efficient Estate Administration
Our team oversees every phase of the process, ensuring all tasks are completed smoothly and efficiently.
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04
Transparent Communication
We keep beneficiaries informed and involved, providing clear updates and respecting the sensitivities involved.
05
Respectful Distribution
Following the will’s instructions, we ensure that assets are distributed fairly, balancing the legal requirements with the deceased’s wishes.