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If a construction company has gone bust, first confirm that the legal company you paid or contracted with is formally insolvent, then contact the official receiver or insolvency practitioner handling its case and submit a documented claim. If you are a homeowner, check separately for a credit-card remedy, chargeback or existing deposit or home-warranty cover: these routes have different eligibility rules and may offer a better prospect of recovery than an insolvency dividend. None guarantees that you will get all your money back.
This guide uses UK sources. The right route depends on whether you are a homeowner, subcontractor or supplier, how you paid, and the company’s formal status. Insolvency rules and procedures can vary across the UK, so treat this as general guidance rather than advice on an individual case.
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What should I do first if a construction company has gone bust?
Verify the company’s identity and formal insolvency status before sending a claim. A builder stopping work, closing its website or failing to answer calls does not, by itself, prove that it has entered liquidation or administration or that an insolvency practitioner has been appointed.
- Identify the legal company. Check the name on your contract, estimates, invoices and payment records. A trading name may differ from the registered company name, and a claim generally needs to be directed to the legal contracting party.
- Check the company’s status. Search Companies House and relevant insolvency notices. The Insolvency Service explains how creditors can use official records to identify proceedings and the person managing the case in its guidance for people owed money by an insolvent company.
- Find the case handler. Depending on the process, the case may be managed by an official receiver or an insolvency practitioner. Use the contact details in the official case information rather than assuming that the company’s former owner or a site manager can accept a formal claim.
- Preserve your evidence. Keep the signed contract, estimates, variations, invoices, receipts, bank or card statements, messages, letters, photographs, site records and any independent report. Make copies and keep a dated record of your contacts.
- Send a clear claim. Write to the case handler with the amount you say is owed, how it arose, what you paid or supplied, and a simple calculation. Attach supporting documents and complete a proof-of-debt form if one is supplied or requested. The Insolvency Service’s creditor guidance describes making a claim in a compulsory liquidation.
If you cannot find formal insolvency proceedings, do not describe a liquidator or administrator as already being in control. Ask the company or its representatives what has happened and consider tailored legal advice if the amount or risk warrants it.
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Make a recovery file immediately
Create one folder, digital or paper, containing the contract, every variation, quotations, invoices, receipts, card slips, bank statements and the full email or message history. Add dated photographs showing the state of the site, a list of defects, and a schedule of work that was completed, partly completed or never started. If you obtain an independent survey or estimate for finishing work, retain the report and explain who prepared it. The Financial Ombudsman Service identifies contracts, proof of payment and correspondence as useful evidence in payment-provider disputes.
Record the company’s exact name, registered number, trading address and the project address. Keep notes of telephone calls, including the date, person spoken to and promises made. Send important information in writing and retain delivery or email evidence. These practical steps help the insolvency practitioner, card provider or insurer distinguish your claim from an unsupported estimate.
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Make it easy for the case handler to understand both the basis of the debt and the amount. A claim is stronger when each figure can be traced to a contract, payment, invoice, delivery record or other relevant document.
Include your name and contact details; the company’s exact legal name; the project address or reference; a short explanation of the agreement; the amount claimed and how you calculated it; and a list of attached evidence. For a homeowner, explain what work was agreed, what was completed, what was paid and what remains unfinished. For a supplier or subcontractor, identify the relevant order or subcontract, invoices or applications for payment, and any materials delivered or work performed.
Separate amounts by category rather than sending one unexplained total. For example, show deposits paid, invoices already paid, unpaid invoices, the value of materials delivered, and any sum you seek for an uncompleted element if the procedure permits it. Mark figures as inclusive or exclusive of VAT where relevant, and identify credits, refunds, insurance payments or sums already recovered.
Use the insolvency practitioner’s form and instructions where provided. Keep a copy of what you submit, note the date and method of delivery, and tell the case handler if the amount changes or you later receive money from another source. Do not claim the same amount twice. Ask how future notices, voting forms and dividend updates will be issued, and notify the case handler if your address or bank details change.
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You can submit a claim for a deposit, advance payment or other amount owed, but an insolvency claim is not a guaranteed refund. The company may have too few assets to repay ordinary creditors after higher-priority claims and costs are dealt with.
Ask the case handler how to register your claim and whether a proof-of-debt form is required. Explain what the payment was for and attach the contract, receipt or statement showing the payment, and any correspondence about the work or refund. If the work was left incomplete, keep a record of its condition and the remaining work; do not assume the insolvency process will arrange for another builder to finish it.
If you hire another contractor, obtain a written scope and keep quotations and invoices. The difference between the original contract price and reasonable additional completion costs may be relevant to a policy or contractual claim, but the insolvency practitioner will determine what is admissible in the case. Avoid describing all replacement-work costs as a debt without checking the contract and the applicable process.
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The amount you can recover, if anything, depends on the company’s available assets, the costs and priority claims in the case, and the amount of valid claims. The House of Commons Library notes that customers owed refunds and suppliers owed payment are examples of unsecured creditors, whose recovery can be little or nothing if assets are insufficient. Its UK company insolvency briefing explains the broad priority structure. The Insolvency Service puts the practical risk plainly: “If the person or company has no assets you will not get your money back.”
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Describe the cancellation and the contractual basis for any refund. Include evidence that you requested repayment and explain whether the company supplied any materials or services before stopping. If part of the work was accepted or usable, identify that separately from the unused balance. This helps the case handler assess the debt rather than treating the entire contract price as automatically refundable.
Can I claim through my credit card or ask for a chargeback?
Possibly. Ask your card provider promptly to assess whether Section 75 or chargeback applies to your particular transaction. These are separate routes with different rules, and neither should be treated as an automatic refund simply because a builder has failed.
Section 75 for a credit-card purchase
Section 75 may apply to qualifying credit-card purchases priced between £100 and £30,000. The threshold relates to the qualifying purchase price, not necessarily the amount charged to the card on one occasion. A deposit below £100 can therefore be relevant when it was paid towards a qualifying purchase whose total price meets the threshold. However, the way the payment was arranged and the relationship between the debtor, creditor and supplier matter; not every payment to a builder qualifies.
Contact the card provider, explain the contract and payment arrangement, and ask it to assess a Section 75 claim. The House of Commons Library describes the statutory price range, while the Financial Ombudsman Service explains that the transaction structure can affect eligibility. Provide the agreement, evidence of payment and correspondence about the failed work or refund.
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Explain whether you paid the builder directly, through an intermediary, or using a payment platform. The provider will examine the debtor-creditor-supplier relationship and the qualifying purchase, so do not assume that splitting a contract into instalments changes the legal analysis. Ask what information is still needed and keep the provider’s complaint reference.
Chargeback and debit-card payments
A debit-card or other eligible card payment may be considered under the card scheme’s chargeback process. Ask the bank or card provider how to make a request and what deadline and evidence apply to your transaction. A chargeback is not the same as Section 75 and the provider may reject it.
Citizens Advice’s home-improvement guidance says that the card routes described there do not cover cash or bank-transfer payments. The Financial Ombudsman Service also recommends keeping documents such as the contract, proof of payment and correspondence for a payment-provider dispute.
If a provider refunds some or all of the amount, tell the insolvency practitioner and do not seek the same sum again through the insolvency claim. GOV.UK says that if the credit provider refunds the whole amount, the customer ceases to be a creditor for that same amount and cannot claim it again through the Insolvency Service process. If the refund is only partial, tell the case handler exactly how much remains and how you calculated it.
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Could deposit insurance or a home warranty cover the loss?
Check your contract and policy documents for deposit protection or builder-insolvency cover. A policy is only useful if the claimant, property, payment and circumstances meet its terms, and limits or exclusions may restrict what it pays.
For an eligible new-home purchase covered by NHBC Buildmark, the 2025 policy booklet describes limited cover for specified sums paid to a builder that cannot be recovered, or reasonable additional completion costs, in defined circumstances. The certificate, cover period, applicable limit, requirements and exclusions control. This is not blanket protection for every home-improvement contract. Contact NHBC and follow the claim procedure in your policy documents.
For other building work, check whether your own paperwork identifies deposit insurance or another policy that protects the payment. Citizens Advice recommends checking whether the trader has insurance protecting a deposit. Do not assume such cover exists just because the company described itself as insured; find the policy or certificate and confirm who is covered and what event triggers a claim.
Notify an insurer promptly if the policy has a notice deadline. Give it the insolvency details, contract, payment evidence and an honest account of what remains unfinished. An insurer may require you to mitigate further loss, allow an inspection or use an approved process, so read the policy before authorising major remedial work where it is safe to wait.
What if I am a subcontractor or supplier owed money?
Submit the debt to the administrator or liquidator, and assess your rights under the construction contract separately. Preserve the subcontract or supply agreement, applications for payment, payment notices, invoices, delivery records, site records, correspondence and any adjudication decision.
Check which entity entered the contract and whether the documents for this specific project provide for a guarantee, project account or insurance. Do not assume that a director, main contractor, client or insurer is liable simply because your immediate counterparty has failed. Confirm whether retention, set-off, contra-charges or disputed variations affect the figure you submit.
Construction payment rights can depend on the contract and jurisdiction. Section 113 of the Housing Grants, Construction and Regeneration Act 1996 addresses conditional payment provisions. If there is a dispute about payment, an adjudication, a claim in the insolvency or a possible cross-claim, get advice from a construction solicitor or insolvency practitioner before deciding how to proceed.
Keep supplying information requested by the case handler, but do not surrender original documents. If equipment, materials or title-retained goods are on site, identify them promptly and obtain advice before removing or disposing of them. Whether title has passed depends on the contract and facts; a general assertion that goods remain yours may not be enough.
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How does adjudication interact with liquidation?
The Supreme Court’s 2020 Bresco press summary explains that parties to construction contracts can refer disputes to adjudication and that, in the case before it, adjudication could proceed despite liquidation. The case also illustrates insolvency set-off: mutual debts are netted so the liquidator determines a single balance.
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That does not mean every adjudication decision will produce immediate payment or that set-off can be ignored. The effect depends on the claims and counterclaims and the circumstances of the insolvency. A decision about adjudication, enforcement or the balance due needs to account for both the contract and the insolvency process.
Before starting or continuing adjudication, compare its likely cost and practical benefit with submitting a proof of debt. Consider whether the company has assets, whether there is a real cross-claim, and whether an adjudicator’s decision could be enforced or simply become part of the insolvency accounting. Obtain advice on jurisdiction, timing and any required permission.
Can I claim the money from a director instead?
Not automatically. If you contracted with a limited company, the claim is generally against that legal company; a director is not personally responsible for its debts merely because the company failed.
The House of Commons Library notes that a court may reach a director’s personal assets in specific circumstances, such as proven intent to defraud creditors, and that insolvency practitioners may pursue claims against directors where doing so serves creditors. If you have evidence of suspected misconduct, provide it to the insolvency practitioner and relevant authority. Avoid making allegations of fraud without evidence, and get legal advice before pursuing a personal claim.
Evidence might include contradictory company identities, unusual requests to pay a different entity, or written statements that conflict with the records. Do not publicly accuse an individual or threaten personal action simply because the company stopped trading. The insolvency practitioner can investigate director conduct and decide whether a recovery action benefits creditors collectively.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How long will a claim take, and how much might I recover?
There is no reliable general timetable or repayment percentage for an individual case. Recovery depends on the assets available, the claims and costs ahead of yours, and the complexity of dealing with the company’s property and debts.
The Insolvency Service says initial creditor reports may take up to 12 weeks, and that dealing with assets can take a number of years in some cases. These are general descriptions, not a forecast for a particular construction company. Follow updates from the case handler rather than relying on a standard dividend or completion date.
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Secured claims and insolvency costs generally rank ahead of ordinary unsecured claims. Customers owed refunds and suppliers owed payment are commonly in the unsecured group, although the exact position depends on the proceeding and the nature of the debt. An asset-poor company may produce no dividend at all; a later asset recovery can change the position, but it should not be assumed.
Keep other routes moving while the insolvency claim is considered: for example, contact a card provider or insurer if your transaction or policy may qualify. Tell each relevant party about any recovery from another route so that the same loss is not claimed twice.
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What if I am an employee owed wages?
An employee’s unpaid wages or other employment-related money is a different kind of claim from a homeowner’s deposit or a supplier’s invoice. The routes and priority can differ, so do not assume that the customer or trade-creditor steps above cover an employee claim.
Contact the insolvency case handler promptly and ask which employee-specific process applies to the company and your circumstances. Keep employment documents, payslips, records of hours and any written notice about the company’s insolvency. This guide focuses on customer and trade claims; the sources cited here do not set out the full employee-claims procedure.
Common mistakes that can reduce recovery
- Claiming against the wrong name: match the contract and payment records to the registered entity.
- Assuming a closure equals liquidation: verify the formal process before sending documents to a supposed liquidator.
- Waiting for the insolvency outcome before checking cards or insurance: payment-provider and policy routes have their own requirements and timing.
- Submitting an unexplained figure: provide a calculation and evidence for every component.
- Double recovery: disclose refunds, chargebacks, insurance payments and dividends to every relevant party.
- Assuming an adjudication award is cash: insolvency set-off and cross-claims can change the balance.
- Blaming a director without evidence: report documented concerns through the proper channels instead.
What information should I ask the case handler for?
Ask for the formal case type, the reference number, the name and contact details of the official receiver or insolvency practitioner, the deadline and format for a proof of debt, and how creditor updates will be issued. You can also ask whether an initial report or statement of affairs is available and whether the case handler expects to declare a dividend. They may not be able to give a firm answer while assets and claims are being investigated.
Keep your questions focused and factual. Confirm receipt of your proof of debt, ask whether further evidence is required, and update the handler if your address, bank details or claim amount changes. If you disagree with a decision about your claim, request the reason in writing and obtain professional advice on any challenge.
Frequently Asked Questions
What if the builder has stopped work but is not formally insolvent?
A company can stop trading without having entered a formal insolvency process. Check its legal status and get advice on your contract and next steps before treating an insolvency practitioner as the person responsible for your claim.
Can I claim from the insolvency process after a card provider refunds me?
You must not recover the same loss twice. Tell the case handler about any refund; GOV.UK says a full credit-provider refund means you are no longer a creditor for that amount.
Does NHBC cover a deposit paid for ordinary renovation work?
The 2025 Buildmark insolvency cover described in the policy relates to eligible new-home circumstances and is controlled by the policy terms. It is not general cover for every home-improvement deposit.
Does a construction adjudication decision guarantee that I will be paid?
No. The Bresco summary discusses adjudication proceeding despite liquidation, but insolvency set-off and any cross-claims can affect the balance and recovery. The contract and case facts matter.
What if I paid the builder by bank transfer?
A bank transfer does not use the card routes described by Citizens Advice. Submit a documented insolvency claim and check any deposit insurance, warranty or other contractual protection.
The Bottom Line
Verify the registered company and formal insolvency, preserve every contract and payment record, and submit a clear proof of debt to the official receiver or insolvency practitioner. Homeowners should simultaneously ask their credit-card provider about Section 75, request chargeback where appropriate, and check deposit or warranty cover. Subcontractors and suppliers should review payment, set-off, guarantee and adjudication rights with construction-insolvency advice. Recovery is uncertain and depends on eligibility, available assets, priority and policy limits.
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