When your creditor goes into administration, or “goes bust” there are various consideration to bear in mind. A company will go into administration when it has a serious cashflow problem, making it become insolvent. It will then be put under the management of licensed insolvency practitioners. Once a company has gone into administration, they will no longer offer new credit. However, if you do still owe them money, any existing debt will need to be paid off. Here you can find all the information you will need if your creditor has gone bust.
What Is Administration?
Administration is a term used meaning an insolvency firm has been called in to run the company. It will then get what cash it can for creditors by selling or utilising assets. Theoretically, a business can be kept running, or sold, as a “going concern”, although this is an unlikely scenario in the long term. A more likely scenario is that the insolvency firm will simply collect any assets, attempting to sell what they can, before they distribute whatever cash remains to creditors.
Do I Need To Pay Back My Payday Loan?
Yes, if you have already taken out a payday loan, you will need to repay it, even if the company has gone into administration. Although the lender will be offering no new loans, you should still be able to use their services to manage any existing loans. You are advised to keep to your regular payment schedule, if you do miss any repayments, you could be hit by fees and additional charges, leaving you in a worse position than you started in. Missing repayments also has the potential to damage your credit rating. This is because lenders look at how you’ve managed existing credit when they work out whether or not to lend you money. This will still be he case, even if your creditor has gone bust.
I’m Claiming Compensation From My Payday Lender. What Happens Now?
If you are in the position where you have made a claim and it has been accepted successfully, and this occurred before the payday lender went into administration, you will join a list of creditors, if you are yet to be paid. Once the business has been wound up, the administrators will then begin to distribute any assets that are left. The order in which they decide who is paid first is very strict, meaning you may not receive the settlement you were originally granted.
Will I Get My Money Back?
The job of the administrator is to maximise the value from selling off the company, and if keeping it as a going concern in order to sell it does that, then it’ll keep trading. That may mean you can simply get a refund. If not, to have the best chance of receiving your cash, you will have to apply to the administrator, not the company. If it comes to this point, do not count on getting all of your money back, although you may be lucky and get a small, partial refund.