How can I get my money back if a company goes bust?

1 Check insolvency details

Before starting a claim to get your money back, you should find out if the business has officially gone bust.

As soon as a company goes into administration an insolvency practitioner is appointed as administrator.

Try to get the contact details of the administrator dealing with the company, as they will temporarily be in control over the company operations.

If the business is a sole trader (such as a tradesperson working on their own) or partnership, find out whether insolvency proceedings have started.

You can do this by checking the insolvency notices section of local newspapers or by checking the Individual Insolvency Register.

If the business is a limited company, you can look them up on Companies House.

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2 Submit a claim

On the company's website you should be find the details of who the administrators are and any formal process that has been agreed, or you may had been contacted by email with these details.

Write to the administrator dealing with the company to register your claim, explaining exactly how much money you’re owed, and what it’s for.

The administrator will usually outline whether there are plans to issue refunds or not.

There’s no guarantee you’ll get all or any of your money back because it's likely the company has many debts. 

3 Credit card protection

If you buy goods or services on your credit or debit card, you have extra protection if things go wrong compared with paying by cash or cheque. 

Under Section 75 of the Consumer Credit Act, you can make a claim against your card provider if something goes wrong with an item you’ve bought. 

Section 75 means that your credit card provider is jointly liable if something goes wrong. This means it's equally responsible along with the retailer or trader for the goods or services you’ve bought. 

So if the goods or services you paid for cost you between £100 and £30,000, then you can benefit from the full protection of Section 75 by claiming from your credit card company. Remember that it's the cost of the goods or services that are covered, not the amount you paid on credit card.

You can use our letter template to write to your credit card company with details of your claim. 

4 Only paid deposit on credit card

You don’t have to have paid the full amount on your credit card. The card company is liable even if you made only part of the payment – a deposit, say – on your card.

It’s the value of the goods you’re buying that is key, not the amount paid on the card.

So, for example, if you ordered a new sofa from a furniture store, paid a £500 deposit with your credit card and then paid the balance of £1,000 by cheque, you’d be covered for the whole £1,500 if the company went out of business and you didn’t receive your sofa.

5 Chargeback for debit card payments

If you’ve paid by debit card you may also be able to claim through chargeback, as long as it hasn’t been more than 120 days since paying on your debit card and making your claim.

Chargeback is not enshrined in law but is part of Scheme Rules, which participating banks subscribe to.

It applies to all debit cards goods, although exact rules may vary between the Visa, Maestro and American Express networks.

You can read our detailed guide for more information on how to use chargeback.

6 Get faulty goods sorted

If the retailer goes bust and the goods you have from them are faulty, you may have a manufacturer's or other third-party warranty that’s still valid.

Check your documentation to see whether this is the case, as this may help you to get a replacement, repair or refund.

If you’ve been supplied with faulty goods and the company is placed into administration but is still trading, you may be able to get a replacement or a refund for your item in the normal way, under the Consumer Rights Act.

7 Using vouchers when a company goes bust

There can be nothing more frustrating than having a voucher or gift card for a high street chain only to find that it will no longer be accepted because the chain has gone into administration.

A number of high street stores have refused to allow customers to use vouchers or gift cards once they had gone into administration even though they had already accepted money for them.

8 Why do they refuse vouchers?

When high street chains go bust, the administrators see customers with vouchers and gift cards as creditors. 

This means you have to get in line with all other creditors, such as the Inland Revenue, mortgage companies, loan companies and the government, to try to claim back any money owed.  

The administrators are required to treat all unsecured creditors equally and can’t prioritise one over the other.

9 How can I get my voucher money back? 

If the shop chain you are dealing with will not accept your voucher or gift card, and you didn’t pay for it using your debit or credit card, then you should make a claim in writing to the administrators.

You need to make a claim in writing to the administrators with proof of your vouchers or gift cards.

The names of those administrators are usually on the website of the company that has gone into administration.

But there’s no guarantee that you will get all or any of your money back, and it could take up to 12 months to process the claim properly.

Not all administrators will take this approach, however. Woolworths, for example, was accepting vouchers before it closed, and children’s clothing chain Adams was still accepting vouchers in its stores.

If you're not the person who bought the voucher or gift card, you should get in touch with the person who purchased it and ask them if they paid for it by debit or credit card and, if so, to make a claim against the card provider.