Company Gone Bust? How to Get Your Money Back

When a company goes into administration, most customers assume their money is gone. It usually isn't. There are several ways to recover your cash, and some of them are surprisingly effective. Whether it's a retailer, travel company, tradesperson, or service provider, here's your complete guide to getting your money back.

Your Best Routes to Recovery (Ranked)

Not all recovery methods are equal. Here they are, ranked from most effective to least:

1. Section 75 Credit Card Claim (Strongest)

If you paid any part of the purchase (even £1) on a credit card, and the total item cost was between £100 and £30,000, Section 75 of the Consumer Credit Act makes your card provider equally liable with the seller.

This means your credit card company must refund you if:

• The company has gone bust and can't deliver what you paid for
• The goods or services were faulty or not as described
• There was any breach of contract or misrepresentation

How to claim: Contact your credit card provider and say you want to make a Section 75 claim because the company has entered administration and cannot fulfil the contract. Provide your card statement, proof of purchase, and confirmation of the company's insolvency.

Success rate: Very high. Section 75 is a statutory right: the card company can't refuse a valid claim.

2. Chargeback (Debit and Credit Cards)

If you paid by debit card (or credit card for purchases under £100), you can request a chargeback through your bank. This isn't a legal right; it's a voluntary scheme run by Visa, Mastercard, and American Express, but it works well.

Time limit: Generally 120 days from when you became aware of the problem (not from the original payment date). When a company goes bust, the clock starts from the date of administration.

How to claim: Call your bank and request a chargeback, explaining the company has gone into administration. Provide your transaction details and any evidence of the administration.

3. ATOL Protection (Travel Only)

If you booked a package holiday or flight through an ATOL-protected travel company that goes bust:

• If you haven't travelled yet: You'll get a full refund through the ATOL scheme
• If you're abroad: ATOL will arrange for your return home
• If your trip was partially completed: You'll be refunded for the unused portion

Check your ATOL certificate. You should have received one when you booked. If you didn't, your trip might not be ATOL-protected.

4. PayPal Buyer Protection

If you paid via PayPal, their Buyer Protection programme may cover you. Open a dispute within 180 days of the payment.

5. Claiming as a Creditor

If none of the above apply (you paid by bank transfer, cash, or the amount was too small for Section 75), you can submit a claim to the administrator handling the company's insolvency.

Reality check: Unsecured creditors (which is what individual customers are) are near the bottom of the priority list. Employees, HMRC, and secured creditors all get paid first. You'll typically receive pennies on the pound, sometimes nothing.

How to claim: The administrator will publish details on how to submit claims (usually on the company's website or Companies House). Register your claim with proof of purchase.

What About Gift Cards and Vouchers?

Bad news: gift cards and vouchers are almost always worthless when a company goes into administration. You're treated as an unsecured creditor for the value of the card.

Exception: If you bought the gift card on a credit card for over £100, you can make a Section 75 claim against your card provider for the value of the unspent card.

Tip: Don't hoard gift cards. Spend them as soon as possible after receiving them.

Ongoing Subscriptions and Direct Debits

If you're paying a monthly subscription or direct debit to a company that's gone bust:

1. Cancel the direct debit immediately through your bank
2. Cancel any standing orders separately (standing orders and direct debits are different things)
3. Claim back any recent payments for services not received via chargeback

Under the Direct Debit Guarantee, you can claim back any payment taken in error or for which the amount or date was changed without proper notice.

Insurance Policies

If your insurance company goes bust, the Financial Services Compensation Scheme (FSCS) protects you:

• Compulsory insurance (like motor insurance): 100% of the claim is covered
• Other insurance (home, travel, pet): 90% of the claim is covered

Contact the FSCS at fscs.org.uk.

Deposits for Work Not Done

If you paid a deposit to a tradesperson (builder, plumber, decorator) who has gone bust or disappeared:

1. Check if they were a member of a trade body (Federation of Master Builders, TrustMark, etc.): some offer dispute resolution and financial protection
2. Section 75 claim if you paid by credit card
3. Small claims court if the individual is still trading or has personal liability
4. Check their insurance - reputable tradespeople should have public liability insurance that may cover your loss

Timeline: What to Do and When

Day 1: Cancel direct debits and standing orders. Secure any evidence of your purchase.

Week 1: File a Section 75 or chargeback claim with your card provider. Register for updates from the administrator.

Month 1: Submit a creditor claim to the administrator if other routes don't apply.

Months 2–6: Follow up on your card claim. Chase the administrator for updates on the creditor process.

The key lesson: how you paid determines how easily you can recover your money. Credit card payments give you the strongest protection. Bank transfers and cash give you the least. Plan your payment methods accordingly, especially for large purchases or advance payments.