Your Rights When a Company Goes Bust (UK)

When a business you paid enters administration or liquidation, your money is at risk — but you are not powerless. The route that gets your money back fastest is almost never "wait for the administrators." This guide covers the practical steps that actually recover cash: chargeback, Section 75, and registering as a creditor.

1. Act immediately

The moment you hear a supplier has failed, stop waiting. If the store is still trading, spend gift cards or take undelivered goods you've paid for. For card payments, the clock on chargeback (often 120 days) can start ticking from the transaction or the expected delivery date — delay can lose the right.

2. Chargeback and Section 75 (card payments)

• Section 75 (Credit Cards): if you paid by credit card and the item cost between £100 and £30,000, the card provider is jointly liable with the retailer. Claim directly from your card issuer — this is usually the strongest route and survives the retailer's insolvency. Our Section 75 generator drafts the letter.
• Chargeback (Debit/Credit): a scheme-based reversal for non-delivery, unauthorised, or not-as-described transactions. Time limits are tighter (often 120 days). Our chargeback generator helps.

3. Sectors with built-in protection

• Package holidays: ATOL/ABTA protection may refund or repatriate you.
• Regulated financial firms: the Financial Services Compensation Scheme (FSCS) can cover certain claims.
• Client accounts: solicitors and some agents hold client money that is ring-fenced.

4. Registering as a creditor

If card routes don't apply, you become an unsecured creditor. The administrators will publish a claim form (often via a portal). Submit your evidence (invoice, receipt, correspondence). Be realistic: unsecured creditors rank below secured creditors and employees, so recovery is often partial or nil — which is exactly why the card routes above matter more.

5. Gift cards and vouchers

A gift card is effectively a loan to the company. In administration it is rarely honoured. Your realistic options are a Section 75/chargeback claim if you bought the card by card, or a creditor claim. Spend it the instant the shop is still open.

6. Frequently asked questions

Do I lose my gift card if a shop goes into administration?

Often yes, in practice. A gift card is unsecured credit to the company, and in administration the business is not obliged to honour it. Act fast: spend it immediately if the store is still trading, or try a chargeback/Section 75 claim if you paid by card.

Is my deposit protected if the company fails?

Not automatically. For some sectors (e.g. package holidays via ATOL/ABTA, or client money held by regulated firms) there is protection. Otherwise your deposit is an unsecured claim — pursue chargeback, Section 75, or register as a creditor.

What is the difference between administration and liquidation?

Administration aims to rescue the business or sell it as a going concern; liquidation winds the company up and sells assets. In both, unsecured creditors (including customers) rank low and rarely recover the full amount.