Legally Irrecoverable Loans or Debts

If the loan or debt is...

then the Statute of Limitations operates from...

repayable on demand

the later of:

- the date of demand, or

- the date of the last repayment.

subject to regular repayments or repayments at will,

the later of:

• the date of the loan, or
• the date of the last repayment.

repayable on a specific date

the specific date that repayment is due.

If the individual debtor...

then the loan...

and...

is an undischarged bankrupt,

may be irrecoverable or may be partially recoverable,

if the loan is:

• irrecoverable it is an exempt disregarded asset.
• partially recoverable it is an assessable asset and the assessable amount is the amount recoverable.

• is a salary or wage earner with saleable assets, and

• has little scope for large future increases in either assets or income

is partially recoverable,

• an assessable asset, and

• the assessable amount is the amount recoverable.

• is self employed, and

• is operating at a profit

is recoverable

an assessable asset.

• is self employed, and

• is operating at a loss or winding up the business

may be irrecoverable or partially recoverable

If the loan is:

• irrecoverable, it is a disregarded asset.

• partially recoverable, it is an assessable asset. The assessable amount is the amount recoverable.

If the trust

then the loan is...

and...

• is continuing to trade, and

• is solvent,

recoverable

an assessable asset.

• has ceased trading, and

• is not producing gross income, and

• has saleable assets

possibly recoverable

may be an assessable asset.

• is being wound up, and

• has insufficient assets to repay the loan in full

partially recoverable

an assessable asset.