Most of the options close the moment an office holder is appointed. Here is what is left and what it is worth.
If your customer has entered an insolvency process, most of the recovery options on this website close immediately. Understanding which ones and what is left is the difference between salvaging something and spending more money to recover nothing.
The blunt reality first: unsecured trade creditors usually recover very little, and often nothing. Anyone who tells you otherwise before looking at the case is selling you something.
In administration, a statutory moratorium prevents legal process against the company without the administrator's consent or the court's permission. In liquidation, proceedings are effectively at an end and enforcement against the company's assets is over. Continuing to spend on recovery against the company itself after that point is buying nothing.
Four things, and they are worth checking in this order.
Retention of title. If you supplied goods under a properly drafted and properly incorporated retention of title clause, and the goods are still identifiable and unsold, they may still be yours rather than the estate's. This is the single most valuable thing a supplier of goods can have and it needs to be raised with the insolvency practitioner immediately.
A personal guarantee. A guarantee from a director is a separate contract with a separate party, and the company's insolvency does not extinguish it. If you have one, you still have a live claim against a solvent person.
Any security you hold. A charge, a lien, a retention held by someone else — all change your position in the queue.
VAT bad debt relief. Where you have accounted for VAT on an invoice that has not been paid, relief can be claimed once the debt is more than 6 months overdue and has been written off in your accounts. On a large bad debt this is real money and it does not depend on the customer's insolvency at all. It is your accountant's job, not ours — but it is the first thing to ask them about.
You submit a proof of debt to the office holder with the evidence supporting it. It costs little and occasionally produces a dividend. Keep expectations proportionate: after the costs of the insolvency, secured creditors and preferential claims, unsecured trade creditors are at the back of a long queue.
Distress is usually visible before the appointment, and the warning signs are consistent: accounts filed late or as unaudited micro-entity accounts where they used to be fuller; a change of registered office to an accountant's address; new charges registered against the company; a sudden change in payment behaviour from a customer who was previously reliable; part payments that arrive without explanation.
A customer who starts paying you in odd instalments and stops answering questions about the account is a customer to act on this month, not next quarter.
Three things. Stop any further supply on credit. Check whether you have a retention of title clause and, if you supplied goods, whether any are still identifiable — and tell the administrator in writing straight away. Check whether you hold a personal guarantee. After that, submit your proof of debt and speak to your accountant about VAT bad debt relief.
Generally not without permission. Administration carries a statutory moratorium on legal process, and in liquidation there is nothing useful to enforce against. Spending on a claim against an insolvent company is almost always throwing good money after bad.
It can help considerably. Insolvency set-off operates automatically where there have been mutual dealings, so the sums are netted off and only the balance is claimed or owed. If you owe the insolvent company money and it owes you more, that is a materially better position than being a pure creditor — tell the office holder.
Usually not against the company, and we will say so. Where there is a personal guarantee, a solvent parent, or goods subject to retention of title, there is something real to pursue and it can be worth doing quickly. Where there is not, the value is in the write-off and the VAT relief, and you do not need us for that.
The letter-before-action checklist, the interest and compensation rules, and the escalation ladder with what each step costs. One email, no sequence.
Tell us what you are owed and who owes it. You get back what the debt is actually worth once interest and compensation are added, what we would do first, and the fixed fee for doing it.