What to do if your creditor goes into administration

If you have a debt with a business that's going into administration, it's important to know where you stand. Here, we explain what it means for you and what to do if your creditor goes out of business.

What happens when a creditor goes into administration?

A company goes into administration when it has serious cashflow problems and becomes insolvent. It's then put under the management of licensed insolvency practitioners.

If a creditor goes into administration, they’ll no longer offer new credit. However, if you owe money to them, any existing debt will still need to be paid.

I have a debt with a company that's gone into administration, what should I do?

You should continue making your payments towards your debt as normal. In most situations, the administration process won’t affect the repayment term of your credit and if you miss payments you'll be subjected to the firm's standard debt collection process.

If you have any questions, contact the company directly.

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Can I get a refund?

Depending on the circumstances, some customers may be able to make a claim for compensation. However, the complaints must be eligible, and the amount of compensation people will receive depends on the process of the company's closure.

I’m a StepChange client with a debt to a closing business, what should I do?

If you’re on a debt management plan (DMP) or token payment plan (TPP)

Continue making your monthly payment DMP or TPP to us as normal. We’ll be monitoring the situation closely and will make sure your payment gets to where it needs to be.

If you’re on a debt relief order (DRO)

Your loan, credit card or store card is still a qualifying debt and the creditor going into administration should have no impact on the success of your DRO.

If you’re on an individual voluntary arrangement (IVA) or trust deed

Keep making your IVA or trust deed payment as normal. We’ll be monitoring the situation closely and will make sure your payment gets to where it needs to be.

If you’re bankrupt or have gone through sequestration

Your debt can still be included in your bankruptcy or sequestration. The creditor into administration shouldn’t impact your solution and your official receiver (OR) or Accountant in Bankruptcy (AiB) should be aware of the on-going situation.

My debt management plan (DMP) company has closed down

A number of debt management firms have closed down after failing to meet the standards expected by the Financial Conduct Authority (FCA). Others have gone out of business due to financial problems.

If your DMP company has closed down, you may be wondering where you stand, and if you can carry on with the arrangement you currently have with your debts. Find out more here.

I’m worried about my debt, what should I do?

If you’re worried about your debt, you need expert debt advice. Our team of debt experts help 620,000 people a year to deal with their debt problems. Our free, impartial and confidential advice is tailored to your situation.