When a business closes down because it is unable to pay its debts, it usually means that it is in receivership, under voluntary administration or in liquidation. This often means that we, consumers, don’t get much advance warning – so we might not have the opportunity to spend our gift vouchers or collect our item on layby, etc.
If you are in this situation you may be able to make a claim for what is owed, but you are likely to fall into the category of unsecured creditors.
Unsecured creditors only get money after the liquidator (whose job it is to sell off business assets in order to pay its debts), have paid secured creditors, employees and Inland Revenue (and only if you have registered your claim).
What your rights are when a business closes down, and how to get back any money that it owes you.
Being an unsecured creditor, you may be able to claim back the value of the voucher if there is enough money left over from the sale of assets after other creditors have been paid.
If the business is not yet in liquidation, it’s worth holding onto your voucher in case the business is sold to a new owner who is willing to honour it or the business is otherwise able to continue trading.
Deposits on goods or services
If you had put down a deposit with the business before it closed down, then you can try to claim the money back as an unsecured creditor. This is also the case if you paid for goods via mail order or online, but the business closed down before you received what you ordered.
If your layby payments are up-to-date, you have the right to pay for and collect your item within a reasonable time. However it would pay to do so promptly as it is possible the business will run out of stock.
Goods on layby must be given out in date order of the signed agreements i.e. someone who started a layby three months ago can collect their goods before someone whose layby started one month ago.
If your payments are up to date, but the business aren’t able to complete your layby (e.g. because there is no stock left), you can make a claim for a refund. Your claim will have priority over unsecured creditors.
Goods bought on credit
If you bought goods on credit then your credit contract is most likely with a finance company rather than the business you bought the goods from. This means you won’t lose your goods and should continue to make your finance payments.
What to do to get your money back
If you are owed money by a company (name officially ends with “Limited” or “Ltd”) that has closed, contact the receiver or liquidator to register your claim. You will need to put your claim in writing and provide evidence of what you are owed.
If the business was not a registered company then the trader will be personally responsible for returning your money. You can claim money back at the Disputes Tribunal or Court (unless the trader is declared a bankrupt).
Know more about your rights, visit, call or email your CAB.
For more information call/email or visit your local CAB.