The Personal Properties Securities Register (PPSR) established under the Personal Properties Securities Act 2009 (Cth) (PPSA) records security interests held by creditors over certain personal property of debtors.
A consequence of registration of security interests over the assets of a debtor, is that registration may also provide an indication of the apparent credit risk of the debtor to the world at large. For example, numerous PPSR registrations over a company is likely to indicate that the company may be indebted to numerous creditors. This may have an impact on that company’s ability to raise necessary finance.
However, not all registrations of security interests on the PPSR may be current or legitimate. It’s common with some debtors that their PPSR registration profiles may contain registrations which no longer apply, or worse, were improperly recorded on the PPSR.
We have been advising clients that if they wish to improve their apparent credit risk profile on the PPSR, they should seek to have the non-current and improperly registered security interests removed from the PPSR.
The PPSA sets out a process for dealing with those registrations, which involves:
- written demands by the debtor to the secured parties to remove or amend the registrations on the basis that the registrations no longer (or never did) secure any obligation from the debtor to the secured parties, including the payment of monies owed (e.g. in circumstances where the debtor has paid the creditor/secured party all amounts owed); and
- if the secured parties do not remove or amend the registrations within 5 business days of service of those written demands, the debtor may apply to the Registrar under PPSA and seek assistance to have the registrations amended or removed.
If you would like assistance with the removal or amendment of registered security interests on the PPSR, please contact Nevett Ford.