What to do if a company goes bust FAQs

Airline goes bust

My son is on holiday in Africa, and I'm worried because I've heard that the airline he's flying with has gone bust. How will he get home?

If your son booked a flight that was Atol protected, ATtol will automatically make arrangements for another flight home. However, if his flight wasn't part of a package holiday, that is, he booked it direct with the airline, or the ticket was issued to him at the time he bought it, he may not have Atol protection.

Unfortunately, if the trip was not Atol protected your son will have to buy another flight home, though it's worth checking to see whether his travel insurance will cover the cost of flights home.

Holiday company

I've booked and paid for a family holiday to Greece next month but I've just found out that the tour operator has gone bust. Will we still get our holiday?

If your holiday was booked as a package through a tour operator, it will be bonded by an organisation such as Atol, ABRA or AITO, and your money will be refunded. You can then book another holiday with someone else.

If your trip wasn't bonded, all may not be lost. If you paid on your credit card, you may be able to claim against your credit card company for a refund under Section 75 of the Consumer Credit Act.

Lost kitchen

I paid a £500 deposit for a new kitchen but now the store has gone out of business. Can I get my money back?

If you paid at least some of the deposit on your credit card you are entitled to a full refund from your card company under Section 75 of the Consumer Credit Act. Contact your card company to make a claim. However, if you paid cash you will have to put in a claim to the receivers. But you are likely to be one of many creditors and unfortunately you probably won't get all of your money back.

Claiming furniture

I ordered a new three-piece suite from a furniture store two months ago and paid the £2,500 cost in full. Now the store has gone bankrupt. What are the chances of getting my furniture, or my money back?

If the items are in a warehouse somewhere and are clearly identifiable as yours (labelled with your name) the receivers that are winding up the store's business should make sure that the order is honoured and you receive your goods.

If this isn't the case you will have to register a claim with the receivers and may get only a small proportion of your money back. However, if you paid by credit card you are entitled, under section 75 of the Consumer Credit Act, to get a full refund from the credit card company. Contact your credit card company to make a claim.

Insurance claim

I've just found out that my buildings insurance company has gone into receivership. What if something happens to my house and I'm not insured?

The Financial Services Compensation Service (FSCS) is a free independent service that protects you if financial companies go bust or are unable to meet your claims.

You might be entitled to compensation if you've suffered a financial loss as a result of a company going bankrupt – for example, if you've paid in advance for a policy that is now invalid. You will need to switch to a different insurer as soon as possible but the FSCS will cover you in the interim period so that you are not uninsured.