What to do if a company goes bust and owes you money

Start at Companies House, because it is free and it settles the question in about ninety seconds. GOV.UK's company information service gives you the registered address, date of incorporation, current and resigned officers, previous company names, mortgage charge data, document images and — the part that matters here — insolvency information. The filings will tell you which procedure the company is in and, usually, who the appointed office-holder is. Do that before you spend a fortnight emailing a customer services address that nobody is reading.

Then work out which procedure it is, because they are not interchangeable. The Insolvency Service's guidance sets out the options. In administration an insolvency practitioner takes control and puts proposals to creditors, aiming to rescue the business, arrange payment or sell the assets. A company voluntary arrangement is a binding agreement with creditors to pay over time while the business carries on trading. A creditors' voluntary liquidation or a compulsory liquidation ends the company and removes it from the register. Administrative receivership is different again: a floating charge holder appoints a receiver to recover its own money.

That last one deserves a sentence on its own, because it disposes of the question people most want answered. GOV.UK states it flatly: an administrative receiver does not make payments to unsecured creditors. If the company is in administrative receivership, proving your debt achieves nothing at all, and your entire effort should go into the card, scheme and compensation routes below.

Do not issue a county court claim against a company in administration. Paragraph 43(6) of Schedule B1 to the Insolvency Act 1986 provides that no legal process — including legal proceedings, execution, distress and diligence — may be instituted or continued against the company or its property except with the consent of the administrator or the permission of the court. The Insolvency Service says the same thing in plainer words: while the administrator is in charge, creditors cannot take legal action to recover their debts or start a compulsory liquidation. A claim issued in ignorance of that costs you the court fee and buys nothing.

Not every closure is an insolvency, and the difference is worth ten minutes of checking. Citizens Advice suggests the obvious first step that people skip: contact the company directly by phone, at its office or by letter, and ask what is happening and whether you can have your item or your money. If you cannot reach anyone, verify the position through Companies House for a limited company, or through the Insolvency Register if the trader was a sole trader or a partnership. A business that has simply stopped answering the phone is still a business you can sue.

Finally, understand why the directors keep their houses. Section 74 of the Insolvency Act 1986 makes every present and past member liable to contribute to the company's assets on a winding up, but section 74(2)(d) caps that contribution for a company limited by shares at the amount unpaid on the shares. For a normal trading company with fully paid shares that is zero. Unless a director gave you a personal guarantee, or the debt was personally theirs, the person who took your deposit is not on the hook for it — and can lawfully incorporate a new company the following week.

Section 75 of the Consumer Credit Act 1974 is the single most valuable provision in this whole area, and its wording is worth quoting. Where the debtor under a debtor-creditor-supplier agreement has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, the debtor has a like claim against the creditor, who with the supplier is jointly and severally liable. Jointly and severally is the operative phrase: you are entitled to pursue the card provider alone, for the whole amount, without first exhausting the supplier.

The limits sit in section 75(3)(b), which disapplies the section for a claim relating to a single item with a cash price not exceeding £100 or more than £30,000. Citizens Advice makes the point that decides most disputes about this: the limits apply to individual items, not to the total value of an order. A single £120 item within a £90 basket qualifies; a £3,000 order made up of £40 items does not. Section 75(3) also excludes non-commercial agreements and certain short running-account credit.

It is a credit route, not a debit one. Citizens Advice states that section 75 is available where you paid by credit card, that it does not apply to debit card payments, and — in a note that will not stay current for long — that it can also apply to buy now, pay later agreements entered into before 15 July 2026. If everything went through a debit card, skip to the chargeback section; the two are frequently confused and they are not the same animal.

The rule that wins deposit cases is the partial payment rule. If you paid part of the cost by credit card and the rest by another method, section 75 still applies as long as the total cost of the item is more than £100, and Citizens Advice is explicit that you can claim the full cost of the item rather than only the amount that went on the card. A £300 deposit charged to a credit card against a £7,000 fitted kitchen that was never installed is a section 75 claim for the full £7,000, not for £300.

This is why insolvency does not defeat the claim. The liability is the card provider's own liability, created by statute and running alongside the supplier's. Section 75(2) gives the creditor a right to be indemnified by the supplier for what it has to pay out, including reasonable costs of defending proceedings — which means recovering from the wreckage of the failed company is the card provider's problem, not yours. A response along the lines of 'the retailer is in administration, please contact the administrator' is not a legal answer and should be pushed back on in writing.

Make the claim in writing and name the section. Set out what you bought, when, what was paid and how, what the supplier failed to do — non-delivery and non-performance are breaches of contract, which is exactly what section 75 requires — and what you want. Attach the order confirmation, the card statement line, any delivery date you were promised, and the Companies House filing or press coverage evidencing the failure. Ask for a decision in writing rather than over the phone.

If the provider refuses, the escalation is free and quick. Under the FCA's complaint-handling rules at DISP 1.6.2R a firm must send a final response by the end of eight weeks from receiving the complaint, and that response must enclose the Financial Ombudsman Service's standard explanatory leaflet, give the Ombudsman's website address and tell you that you may refer the complaint there. DISP 2.8 then sets the outer limits: six months from the date of the final response, and no more than six years after the event or three years after you became aware you had cause to complain, whichever is later.

Chargeback is not a legal right. It is a set of rules operated by the card schemes, which is why nobody can quote you a statute for it and why outcomes are less predictable than under section 75. Citizens Advice describes the mechanism plainly — you ask your card provider to reverse the transaction, and the provider might not agree to do it. Where both routes are open, use section 75, because a statutory liability beats a scheme discretion every time.

It is, however, available on debit cards as well as credit cards, which makes it the main route for most consumer purchases. Ask in writing rather than by phone; Citizens Advice notes providers may refer to it as 'disputed transactions', and that front-line staff knowledge varies enough that you may need to escalate to a manager to be taken seriously. If the claim succeeds, the money is refunded to your card or bank account.

The refund is not final when it lands. Citizens Advice warns that the trader can challenge your refund even after you have had the money back, and advises keeping the funds available for several weeks in case that challenge succeeds. In an insolvency this is less theoretical than it sounds: an administrator or liquidator has a duty to gather in the company's assets, and money reversed out of the estate is exactly the sort of thing a diligent office-holder looks at.

The time limits are the part that catches people out, and they are set by the card scheme rather than by law. Citizens Advice does not publish a universal chargeback deadline, and the practical answer is to ask your provider which limit applies to your scheme and to what date it runs from. What matters for insolvency cases is that the clock generally does not start on the day the company collapsed — it runs from the transaction or from the date delivery was promised, so a deposit paid many months before a scheduled installation can already be outside it before the failure is even announced.

If the provider says no, ask a specific question: did you appeal to the trader's bank? Citizens Advice's guidance is that where the provider did not appeal, you can complain to the Financial Ombudsman Service. That converts a refusal into a complaint about the provider's own handling, which sits squarely inside the FCA's DISP rules and the eight-week and six-month clocks described above.

PayPal is a separate scheme again, with a deadline that is easy to state. Citizens Advice records that if you open a dispute on the PayPal website you have 180 days from when you paid — around six months. That runs alongside, not instead of, a section 75 claim where the underlying payment source was a credit card, so a purchase funded from a credit card through PayPal is worth putting to the card provider as well.

Keep the routes separate in your correspondence. A single email that mentions section 75, chargeback and the administrator in the same paragraph invites the reply that the matter is being handled elsewhere. Send a section 75 claim as a section 75 claim, and a chargeback request as a chargeback request, and record which was sent when.

Package travel is the sector with the strongest statutory protection, and it is worth knowing what the law actually requires before you speak to anyone. Regulation 19 of the Package Travel and Linked Travel Arrangements Regulations 2018 requires a UK-established organiser to provide security covering the refund of all payments made by or on behalf of travellers for any travel service not performed because of the organiser's insolvency, and — where carriage of passengers is included — the cost of bringing travellers home, including financing accommodation before repatriation.

The regulation is unusually explicit about the terms of that protection. The security must benefit all travellers regardless of where they live or where the package was bought, refunds must be provided without undue delay after a request, and repatriation assistance must be free of charge. Organisers established outside the UK who sell packages to UK customers must comply too. Failing to provide the security is a criminal offence, punishable on summary conviction or on indictment.

Regulation 23 sets out one of the permitted mechanisms, and it is the one that explains why package customers do better than everyone else. Money paid by or on behalf of a traveller can be held by a person as trustee until the contract is performed or the money repaid. In the event of the organiser's insolvency, the monies held in trust must be applied to meet the claims of travellers who are creditors for unfinished package travel. Money held on trust is not the insolvent company's money, so it never enters the pot that the queue in the next section is fighting over.

ATOL is the licensing scheme that sits on top of this for flight-inclusive arrangements, and the Civil Aviation Authority names the Air Travel Trust as the primary source of funding when an ATOL holder fails. The CAA's failure guidance describes what it does first: it contacts all suppliers to try to arrange for stays to be completed and returns to operate as planned, so that in most cases the return flights simply run. Where they do not, the CAA may arrange replacement flights and publishes the details on its website and social media.

If you are abroad when it happens, the position on money is specific. Where a supplier — typically a hotel — demands payment for services the failed operator was supposed to have paid for, you can make an ATOL claim for those costs, and the CAA's guidance says claims can include accommodation and other expenses incurred abroad at the time of the failure. Pay if you must, keep every receipt, and claim afterwards rather than arguing at a reception desk in another country.

If you are due to travel, some of the booking may survive. The CAA notes that consumers holding ATOL flight-only tickets can typically still travel, and recommends checking the validity of the ticket with the airline directly. To claim, you complete an ATOL Claim Form and submit the documentation issued by the tour operator together with evidence of payment — receipts, credit card statements and the like. Where you paid by credit card, the CAA may refer you to your card issuer instead, which is not a brush-off: it is the section 75 route, and it is usually faster.

Not everything with a suitcase in it is ATOL protected. The CAA is clear that non-air holiday packages fall outside ATOL, though they may be covered by other schemes such as ABTA or AiTO. The practical consequence is that the first question to answer is who you actually contracted with and under what protection — the answer is printed on the ATOL certificate you should have been issued at the time of booking.

The Financial Services Compensation Scheme is the safety net for customers of UK-authorised financial firms that fail, and it spans a wider range than most people assume: deposits, insurance, investments, pensions, mortgage advice and other regulated services. Where the FSCS applies, you are not a creditor of the failed firm in any meaningful sense — you are a claimant against a compensation scheme, which is an entirely different and far better position to be in.

For deposits the limit is £120,000 per eligible person, per bank, building society or credit union, applying from 1 December 2025, with joint account holders each getting the full limit. Temporary high balances of up to £1.4 million are protected for six months, which is the provision that covers people who have just sold a house or received a redundancy payment or an inheritance. Deposit compensation is also the one route on this page that requires nothing of you: the FSCS states that you do not need to do anything, because it compensates automatically.

For investments the limit is £85,000 per eligible person per firm where the failure occurred on or after 1 April 2019, with lower limits for earlier failures — £50,000 for failures between 2010 and 2019, and a tiered figure before that. The date that matters is the date the firm failed, not the date you invested, which is a distinction that changes the answer for anyone still pursuing an older collapse.

Insurance and pensions are handled differently again. For claims arising from failures on or after 8 October 2020, the FSCS pays 100% for compulsory insurance and long-term insurance, and 90% for other types. Where a pension provider fails the protection is 100% with no upper limit, while claims against SIPP operators are capped at £85,000. Debt management, mortgage advice and funeral plans each carry an £85,000 limit. A failed funeral plan provider is therefore a compensation claim rather than an unsecured creditor claim, which is worth knowing given how much money sits in prepaid plans.

Energy has its own safety net, run by Ofgem rather than by a compensation scheme, and the instruction is unusually simple. If your supplier goes bust, take a meter reading, sit tight and do not switch. Your supply is not interrupted, and Ofgem appoints a replacement supplier within a few days under the Supplier of Last Resort process. Switching in the gap is the one thing that can genuinely complicate matters, which is why the guidance leads with it.

Your credit balance is protected in that process — the single fact most energy customers want and rarely find stated plainly. The new supplier puts you on a special deemed contract, which may initially cost more but is governed by Ofgem's price cap, and you can switch supplier or tariff at any time afterwards without paying exit fees. Prepayment customers can carry on topping up normally through the transition.

Two loose ends catch people out. A smart meter may lose smart functionality with the new supplier and operate as a traditional meter, with the possibility of regaining it later. And microgeneration payments do not transfer automatically: Ofgem states that Feed-in Tariff payments require you to arrange a new FIT Licensee, and that securing a new Smart Export Guarantee tariff is your responsibility. Ofgem points households needing help to the Citizens Advice consumer service on 0808 223 1133, and to Advice Direct Scotland on 0808 800 9060.

In law, a gift card, an unredeemed voucher, a deposit on an undelivered sofa and a paid-for order that never shipped are the same thing: an unsecured claim against the company. There is no special consumer category and no priority. Citizens Advice puts the consequence bluntly — you can register a claim as a creditor, but other people, such as banks, will get paid first, so you might not get any money back. Every other route on this page exists precisely because that one is so poor.

The practical answer changes with the procedure, though, and that is worth checking before you write anything off. In an administration the business may still be trading while the administrator works up proposals, and administrators do sometimes continue to accept vouchers, occasionally on restricted terms such as spending them alongside new money. In a liquidation the shops are closing and there is nothing to spend a voucher in. The Insolvency Service's own summary of the procedures is the quickest way to tell which situation you are in.

For deposits, the question to ask first is whether any part of the payment touched a credit card, because section 75 turns on the cash price of the item rather than on the amount charged to the card. A deposit of a few hundred pounds on a kitchen, a conservatory, a wedding, a car or a holiday brings the whole contract price within the section as long as that price is over £100 and no more than £30,000. This is the difference between recovering the deposit and recovering the value of what you were supposed to receive.

Goods paid for but never delivered fit section 75 cleanly, because non-delivery is a breach of contract by the supplier and section 75 gives you the like claim against the creditor. Where the payment was made by debit card, chargeback is the equivalent route, subject to the scheme deadline running from the transaction or the promised delivery date. Where the purchase was a flight-inclusive package, the ATOL and Package Travel routes take precedence because they are backed by trust money and a statutory fund.

Assemble the evidence once and reuse it on every route. Order confirmations, invoices, the card statement line showing the payment, the delivery or completion date you were promised, any correspondence chasing it, and the Companies House filing recording the insolvency. The same pack supports a section 75 claim, a chargeback, an ATOL claim and a proof of debt, which is the only efficiency available in this process.

One thing that is not a claim: changing your mind. Citizens Advice states that if you bought an item in the shop before it closed, you do not have an automatic right to get your money back if there is nothing wrong with it. Statutory rights attach to faulty, misdescribed or undelivered goods, not to a purchase you have gone off, and an administrator running a closing-down sale is under no obligation to operate the shop's old returns policy.

Finally, stop the money going out. If you are paying by instalments for something that will never be delivered, continuing to pay increases your unsecured claim rather than your chances of receiving anything. Where the payments are made under a regulated credit agreement, take advice before cancelling anything, because the agreement is exactly what gives you the section 75 claim in the first place and you do not want to put yourself in breach of the thing that protects you.

If the other routes leave a shortfall, prove for it. Rule 14.3 of the Insolvency (England and Wales) Rules 2016 requires a creditor to submit a proof to the office-holder in order to recover a debt, subject to exceptions. The rule also deals with transitions between procedures: where an administration converts into a winding up, a creditor who proved in the administration is treated as having proved in the winding up, and the same applies in reverse — so you do not have to start again when the procedure changes.

Small consumer debts get an easier path, and it is one that only works if you read your post. Rule 14.1 defines a small debt as a debt, meaning the total amount owed to that creditor, which does not exceed £1,000. Where a debt is a small debt, the creditor has been given notice of an intended dividend and does not dispute the debt in their response, rule 14.3 treats them as having proved for the purpose of determining and paying a dividend — but for no other purpose. A notice that goes in the recycling is a claim you have quietly dropped.

The order of payment is set by statute, and it explains everything about the size of the eventual cheque. Section 175 of the Insolvency Act 1986 places preferential debts after liabilities under section 174A and the expenses of the winding up, but before all other debts, and gives them priority over the holders of debentures secured by a floating charge. There are two classes — ordinary preferential and secondary preferential — each ranking equally within itself and abating proportionately where the assets do not stretch.

One change since 2020 pushed ordinary customers further down that list. Section 98 of the Finance Act 2020 made certain HMRC debts secondary preferential: VAT, and 'relevant deductions', meaning amounts the business was required by law to deduct from payments to other people and pay over to HMRC, such as PAYE. The change applies where the insolvency date is on or after 1 December 2020, and it operates across England and Wales, Scotland and Northern Ireland. In practical terms, a substantial creditor was moved ahead of the queue that consumers sit in.

What is reserved for unsecured creditors is the prescribed part. Section 176A of the Insolvency Act 1986 requires the liquidator, administrator or receiver to set aside a prescribed part of the company's net property — the amount that would otherwise be available to floating charge holders — for the satisfaction of unsecured debts. The Insolvency Act 1986 (Prescribed Part) Order 2003 fixes it at 50% of the first £10,000 of net property plus 20% of anything above that, subject to a maximum which the Order as originally made set at £600,000. Confirm the current ceiling before relying on it.

The section has holes in it, and they are worth knowing so that a nil return is not a surprise. Section 176A does not apply where the company's net property is below a prescribed minimum and the office-holder thinks the cost of distributing to unsecured creditors would be disproportionate to the benefit, nor where a voluntary arrangement or court-approved arrangement displaces it, nor where the court orders otherwise on disproportionality grounds. And in an administrative receivership there is no unsecured distribution at all — GOV.UK states that an administrative receiver does not make payments to unsecured creditors.

If the office-holder is the problem rather than the arithmetic, there is a defined complaints route. GOV.UK's guidance is to complain to the insolvency practitioner directly first, and then, if you are not satisfied with the response, to submit a complaint to their professional authorising body using the online form — you need to identify which body regulates them, and the Insolvency Service provides a contact form to help. Complaints must relate to something that happened, or that you found out about, within the past three years, and you cannot make the same complaint twice. The Insolvency Service's general enquiry line is 0300 678 0015.

Employees do not join the queue for their statutory entitlements. Where the employer is insolvent, GOV.UK's guidance is to apply to the Redundancy Payments Service, which pays out of the National Insurance Fund rather than out of the company's assets. You can claim a redundancy payment, holiday pay, outstanding payments including unpaid wages, overtime and commission, and statutory notice pay — money for the notice period you should have been given.

The caps are specific and they are the figures to plan around. A week's pay is capped at £751 for redundancies on or after 6 April 2026, and at £719 for those made redundant before that date. Redundancy pay is calculated on age and length of service and counts a maximum of 20 years. Arrears of wages are capped at eight weeks, holiday pay at up to six weeks accrued or untaken in the twelve months before the insolvency, and statutory notice pay at one week per year of employment to a maximum of twelve weeks, payable even if you did not work the notice. Wage-related payments are subject to income tax and National Insurance.

Two details are easy to miss. GOV.UK warns that if you do not apply for benefits after losing your job, you might get less money in your statutory notice pay payment, because the calculation assumes you claimed what you were entitled to. And missing pension contributions are handled separately: the guidance directs you to contact the insolvency practitioner or the official receiver about those. The Redundancy Payments Service line is 0330 331 0020.

If the business was not a limited company, the machinery is entirely different. Sole traders and partners are individuals, so their insolvency is bankruptcy, a debt relief order or an individual voluntary arrangement, and the register to search is the Individual Insolvency Register for England and Wales. Crucially, if they are not formally insolvent, none of the moratorium provisions apply — an ordinary county court money claim is still open to you, and there is no administrator to stand behind.

Corporate insolvency across Great Britain runs on the Insolvency Act 1986, but the procedural rules and courts are not shared. England and Wales operate under the Insolvency (England and Wales) Rules 2016, whose Part 14 governs proving and dividends and supplies the £1,000 small debt threshold used above. Scotland has its own insolvency rules and its own court procedure, so timescales and the forms you are sent will differ even where the statutory outcome is the same.

Personal insolvency in Scotland is a devolved system with its own agency. The Accountant in Bankruptcy describes itself as Scotland's insolvency service and administers bankruptcy, protected trust deeds and the Debt Arrangement Scheme, publishing guidance for creditors as well as for debtors. If a Scottish sole trader owes you money and has gone under, that is the body to deal with, not the Insolvency Service in England.

Northern Ireland has separate statute and a separate administrator. Company insolvency there runs on the Insolvency (Northern Ireland) Order 1989, alongside the Company Directors Disqualification (Northern Ireland) Order 2002, the Insolvent Partnerships Order (Northern Ireland) 1995 and the Corporate Insolvency and Governance Act 2020. The Insolvency Service within the Department for the Economy administers bankruptcies and company liquidations, disqualifies directors and regulates the insolvency profession in Northern Ireland. What does not vary anywhere in the UK is the consumer half of this page: section 75, chargeback, the FSCS, ATOL, the FCA's complaint rules and the Financial Ombudsman Service all operate across all four nations.