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What to do if a company you've used goes bust

Fred Isaac

Fred Isaac
Jun 12, 2017

From sole traders to big high street beasts like Woolworths, a company can go into liquidation and leave shoppers out of pocket.

It can be difficult to know where to turn and what steps, if any, you can take to get your money back.

Whilst you're unlikely to get your money back from a company that hasn't got any, there are various steps you should try. 


Register as a creditor

If a company goes into liquidation, the firm's assets will be sold off and the proceeds used to refund creditors who have been left out of pocket. 

Getting on the list of creditors doesn’t guarantee you your money back, but it does mean you will be kept up to date with the case. The first people the administrator will pay back will be institutions, like banks for example, who were owed money by the liquidated firm. 

To register as a creditor you need to fill out a ‘proof of debt’ form and send it to the administrator handling the bust firm's debts. 

There are different forms for claims against individuals and claims against companies, so make sure you fill out the right one.

You need to send the form to the case handler – usually a court official, who will then pass it on to a lawyer specialising in debt recovery.

To find out who to send your form to, visit the Individual Insolvency Register if you're dealing with a sole trader and the Companies House website if your dispute is with a businesses.

It's worth noting it can take a year to process claims and, even if you do get some money back, it's likely to only be a small amount. 


Credit card protection

Under Section 75 of the Consumer Credit Act shoppers have some hefty protection if they paid for goods or services that haven't been delivered using a credit card. 

You can make a claim direct to your credit card provider for amounts between £100 and £30,000.

It still works even if you only paid for part of the full amount using credit card.

If, for example, you only paid for the deposit with a credit card, but topped up the rest through another payment method, you are still entitled to claim the full amount from your card provider.


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Debit card chargeback scheme

Chargeback is a scheme which allows you to ask your card provider to reverse a charge if there is an issue with the order. 

Your card provider might give you a refund if you paid using debit card; however, they’re not obliged to do so and the rules may vary from provider to provider. 

If they agree, your card provider will try to get the money back for you. To make a chargeback claim you must provide proof that a contract has been broken between you and the company. 

You have 120 days from becoming aware of the problem to make a chargeback claim; or, if you bought the goods in a store, from the day you purchased them. Visa chargeback claims have a cut off point of 540 days from the initial payment date. 



If you've got vouchers for a firm that's gone under, you are viewed as another creditor and may not be able to use them (even though you have already paid for them).

Just like registering as a creditor, the best thing to do is to make a complaint in writing to the administrator (you should be able to find their details on the bust company's website).

Again, this process can be very lengthy - it can take a year for a claim to be processed. 



If the goods you bought from a retailer that's gone pop are faulty, they may be under warranty - with either the manufacturer or a third party; so always check your documents to find out if this is the case.

It could be your saving grace: under the Sales of Goods Act you may still be able to get a replacement or your money back even if the company has gone into liquidation. 

Your paperwork will tell you how long the product is under warranty for and what you are entitled to.

If you're ready to make a claim, make sure you arm yourself with proof of purchase, a copy of the warranty and a description of the problem. 

And remember: if a company has failed to deliver on orders, don't keep quiet about it - kick up a fuss and publicise your issue. 

Raise awareness and warn others by posting on A Spokesman Said.


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