What do I do if a company goes bust owing me money or a service?

The instinct when a company fails is to contact the administrator. That is worth doing, but it is the route least likely to produce money, because consumers sit behind secured creditors and preferential claims. The routes that actually work are the ones that make somebody else liable — your card provider, a sector scheme, or an insurer.

Step by step

1. Establish what has actually happened.Administration, liquidation, receivership or simply ceasing to trade are different. The administrator or liquidator is named at Companies House, along with the status.
2. Gather everything immediately.Order confirmations, receipts, correspondence, delivery promises, and screenshots of the website before it disappears. Websites go offline fast in an insolvency.
3. Check for a sector protection scheme.Package holidays and flights may be covered by ATOL or ABTA. Some trades have insurance-backed guarantees. Energy customers are covered by the supplier-of-last-resort process. Check before anything else.
4. Use Section 75 if you paid by credit card.The card provider is jointly liable for qualifying purchases. This works precisely because the seller has failed, and it does not depend on the insolvency recovering anything.
5. Use chargeback if you paid by debit card.Scheme rules cover goods or services not received and a trader ceasing to trade. Time limits apply from the transaction or the date the goods were due, so raise it now.
6. Check any insurance you already have.Travel insurance may cover supplier failure. Home insurance legal expenses cover may fund a claim. Check both before assuming there is nothing.
7. Register your claim with the administrator anyway.It costs a form. Consumers are generally unsecured creditors, so expect little, but a registered claim is the only way to receive anything if there is a distribution.
8. Check whether a deposit was protected.Some sectors require client money or deposits to be held separately. Ask the administrator whether protected funds exist for your category of payment.
9. Watch for the phoenix company.A new company sometimes takes over the brand and honours some orders. It is under no obligation to, and you should not stop pursuing other routes on the strength of a promise.
10. Beware of anyone offering to recover it for a fee.Claims companies charge a percentage of something you can do yourself, and insolvency-related fee scams are common in the weeks after a collapse.

Tips

• Card routes work best and fastest. Raise chargeback or Section 75 in the first week — the time limits run from the transaction or the promised delivery date.
• Screenshot the company's terms, your order and the delivery promise now. That evidence disappears when the website comes down.
• Paying a deposit by credit card on anything large is the whole reason this route exists. It costs nothing to do at the time.

Common mistakes

• Waiting for the administrator's process — It takes many months and consumers usually receive little or nothing, and while you wait the card scheme time limits expire.
• Accepting a replacement offer from the successor company — It may be worth less than your card claim and can compromise it. Compare both before agreeing to anything.

If it doesn't work

Questions people ask