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Customer gone into liquidation – so what now….?

Customer gone into liquidation

Customer gone into liquidation?

After the Christmas period, January is often a very challenging time for businesses – large and small.

If the Christmas period hit them particularly hard, some firms are forced to call in the administrators or go into liquidation.

If you have a supplier or customer that has gone into liquidation taking your money with them, then it can be a challenging situation but all is not lost.

There are different types of liquidation, such as voluntary and compulsory liquidation. If your debtor company has gone into liquidation it’s possible that you may not get all or any of your money back.

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The first stage of insolvency, an Official Receiver (OR) is usually appointed who works for the Insolvency Service and are attached to the court. An Insolvency Practitioner (IP) will possibly be appointed at a later stage (usually accountants or solicitors) who are authorised to deal with insolvency cases.

The OR or/and IP takes control of the company, with their aim being to sell the assets and to distribute the money between the creditors.

The money which is received is then distributed in an order of priority listed below;

  1. Secured creditors will be paid first
  2. Then liquidators’ fees and expenses
  3. Preferential creditors (such as unpaid wages to employees and contributions to occupational pension schemes)
  4. Any creditor holding a floating charge over an asset
  5. All unsecured creditors, (this is where most Carillion subcontractors will fit)
  6. Any interest payable on debts
  7. The shareholders

Practical steps you should take

  1. Obtain your evidence of the debt i.e. invoices,
  2. Register as a creditor with the OR or/and IP and complete a proof of debt form,
  3. Wait for further information from the OR and/or IP.

Get advice from an expert

Business insolvency can be a complex and confusing process, so it’s best to seek expert advice straight away. There are plenty of people and organisations you can turn to, including:

  • Citizens Advice Bureau
  • Solicitor
  • Qualified accountant
  • Licensed insolvency practitioner
  • Reputable financial adviser
  • Debt-advice centre

However, you should bear in mind that only a licensed insolvency practitioner can take the necessary steps to protect the business or its creditors. They are an officer of the court and they are the only people that can allow debt to write off in a business to be formally binding.

Customer Gone into Liquidation? Get Expert Help From Debt Collectors Now

If you need help with a Debt, our friendly team of Debt Collection Experts is happy to help you today,

SPEAK TO A DEBT COLLECTION EXPERT