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A step-by-step guide for businesses who have lost money in an insolvency


***Please note that the content of these pages are in the process of being updated to reflect the changes introduced by the Insolvency (England and Wales) Rules 2016.***


Insolvency can be a difficult and stressful situation for everyone involved – whether it’s the insolvent company or individual, the debtor, or the individuals and companies who face the possibility of having their debts go unpaid, the creditors.


This guide to insolvency is designed to help creditors negotiate what can often be a complicated process which can sometimes seem time-consuming or confusing. The guide has been written for the sole traders or small companies who are unlikely to be exposed to insolvent debtors on a regular basis, usually known in the insolvency process as ‘unsecured creditors’.


The guide explains the terms you might come across and the insolvency procedures you are likely to be involved in.  Also included is advice on how to increase the chances of getting your money back, how to see misbehaving directors or debtors brought to justice, and how to agree a fair fee with an insolvency practitioner for the work they will be doing to help you.


Where we can, we’ve tried to avoid technical language, but sometimes this isn’t possible:


The nature of insolvency means it isn’t always possible to get all the money you are owed back – sometimes there is no money at all left in an insolvent business that can be used to repay creditors.


However, the more you get involved, the better the chances you have of seeing a positive outcome at the end of an insolvency procedure.


Each step of the insolvency process is summarised in a checklist to help you make sure you’ve done everything that you need to. For insolvency procedures in England and Wales please see here. For procedures in Scotland please see here.