In order to reduce your chances of receiving a preference as a creditor you can employ the following techniques (this information is general in nature):
a) Trade on a COD basis – In order to receive a preference, there must be a debtor/creditor relationship. Trading on a COD basis effectively removes the debtor/creditor relationship, meaning that the payments are not liable to be clawed-back as unfair preferences;
b) Become a secured creditor – Payments made to a secured creditor cannot be clawed-back by a Liquidator or Registered Trustee in Bankruptcy as an unfair preference claim, subject to the value of the security. Refer to FAQ 13 for further information on this.
c) Be aware – The principle requirement for most forms of voidable transactions is that the transaction is an insolvent transaction. Accordingly, it is important to be aware of the possible indicators that a business may be insolvent.