The PPSA or “Personal Property Securities Act 2009” deals with security interests in personal property and assets and allows a creditor to take security for the payment of a debt or obligation by registering an interest over an asset (more commonly known as a “charge” over the asset) on the Personal Property and Security Register.

The Register commenced on 30 January 2012 and is an online database of charges registered.

Practically, this means that when a creditor secures a debt over an asset after an exchange of goods or services has taken place, the security must be registered on the Personal Property and Securities Register to perfect that security (that is, make it binding). In the event that the debtor is unable to repay the debt whether by insolvency, bankruptcy or the like, the Personal Property and Securities Act regulates the ways in which assets may be distributed to creditors, including the priority of the creditors in securing their payment.

The key benefit of the PPS Register is that it allows a creditor to register their asset. In the event a debtor is unable to pay those with the registered assets will take priority over those who are unsecured and unregistered. The Register can also be searched prior to taking a charge or security over an asset so a creditor can ensure they rank first for distribution in the case of insolvency or liquidation.

It  is important that creditors consider their position under the PPSA before taking a charge over an asset – failure to perfect an interest on the register will increase risk of loss of the asset should a debtor become insolvent. Also, a prudent creditor should check the assets for any prior registered and perfected interest as this will affect their claim.

For further information about the PPSA feel free to call the friendly team at Greenhalgh Pickard by emailing or filling out the contact form on our website