1. Confirm it, and which kind of liquidation it is
Every UK liquidation is published in The Gazette, and the notice tells you which kind it is. Check the company by name or number to see the notice and its date.
- Creditors' voluntary liquidation (CVL): the directors and shareholders chose to close a company that cannot pay its debts. You are an unsecured creditor.
- Compulsory liquidation: the court made a winding-up order, usually on a creditor's petition. Same position for you, plus one extra risk covered in step 6.
- Members' voluntary liquidation (MVL): a solvent company closing down. You should be paid in full. It uses the same notice titles as an insolvent liquidation, so read the notice type, not the title.
2. Talk to the liquidator before you change anything
The liquidator is named in the appointment notice in The Gazette, with contact details. In a compulsory liquidation it is usually the Official Receiver at first.
If you have an ongoing supply contract, the law since 2020 (section 233B of the Insolvency Act 1986) usually stops you ending it just because your customer went into liquidation, and stops you making payment of old invoices a condition of supplying again. You can still end it if the liquidator agrees, if new supplies go unpaid, or if a court accepts that carrying on would cause you hardship. In practice most liquidated companies stop trading, so the liquidator will often tell you the contract is no longer needed. Anything they ask you to supply after their appointment is paid as a cost of the liquidation, ahead of the old debts.
3. Submit a proof of debt
Send the liquidator a proof of debt: the amount owed on the date of the liquidation, with copies of the invoices, the order or contract, and any statement of account. The liquidator usually writes to the creditors in the company's records, but do not wait for that letter if you have not had one.
Before any money is paid out, a notice of intended dividend appears in The Gazette with a last date for claims. A claim that arrives after that date misses that dividend.
4. Ask for goods you have not been paid for
If your terms of sale include a retention of title clause, agreed before delivery, goods you have not been paid for may still be yours. Write to the liquidator promptly with your terms, the invoices and a list of the goods. The claim usually only works for goods that can still be identified as yours and have not been mixed into something else. Do not collect them from the premises yourself without the liquidator's agreement.
5. Check what else can reduce the loss
- Set-off: if you also owe the company money, the two amounts are set against each other in the liquidation and only the balance is claimed or paid.
- Personal guarantee: if a director guaranteed the account, the guarantee can be claimed against them directly.
- Credit insurance: tell your insurer now. Policies set short deadlines for notifying an insolvency.
- VAT bad debt relief: once an invoice is six months past its due date and written off in your accounts, you can reclaim the VAT you paid on it. HMRC allows claims for up to four years and six months after that point.
6. If it was a winding-up order: check recent payments
A compulsory liquidation is treated as starting on the day the winding-up petition was presented, not the day of the order. A payment the company made to you after the petition was presented can be void, and the liquidator can ask for it back unless the court approves it. That is why a winding-up petition against a customer is the moment to stop extending credit, not the order weeks later. You can check a company for a winding-up petition for free.
7. Expect a small share, if any
The liquidator pays out in an order the law sets: costs of the liquidation and creditors with security first, then preferential creditors such as employees and, for some taxes, HMRC, then unsecured creditors like most suppliers. A part of what a floating-charge lender would receive is set aside for unsecured creditors, but unsecured creditors often recover a few pence in the pound and sometimes nothing. The liquidator's progress reports tell you what to expect.
8. Find out about the next one earlier
Most suppliers learn about a customer's liquidation from the liquidator's letter, when the notices about it have already been public for days or weeks. The Gazette publishes each of those steps, and InsolvencyRadar reads it every hour. With insolvency alerts on the customers you supply, you get an email and a webhook the day a petition, administration or liquidation notice names one of them, with a link to the notice itself. Solvent members' voluntary liquidations are labelled as solvent, so they do not set off a false alarm.
General information about the law of England and Wales, not legal advice. Scotland and Northern Ireland have their own rules for some of these steps.