When a business closes its doors for good, consumers often call Consumer Protection with concerns about what happens with the goods or services they’ve paid for but are yet to receive, or what to do with unspent gift vouchers or credit notes.
How consumers and creditors are affected when a business goes bust depends on the circumstances.
If the business is a company, it becomes insolvent and can be put into voluntary administration where steps are taken to save it. Should that fail, the next step is often liquidation where the company’s affairs are wound up and assets distributed. But who gets paid first?
If there is money left after paying secured creditors such as suppliers, and then any employees – you as a consumer are the last in line to be repaid. You can register with the administrator or liquidator as an unsecured creditor, but you may only get some of your money back or nothing at all.
