Getting Paid If Your Employer Goes Out of Business or Disappears

When a company falls into financial trouble and goes out of business, its employees are often uncertain, wondering if they will receive the money owed to them. This article outlines what steps you can take to ensure you’re paid.

Understanding Insolvency

Your first step is to determine if your employer is officially insolvent. Insolvency means the company can’t pay its debts. If so, an insolvency practitioner will manage the company’s debts and guide you on claiming any owed pay.

Claiming Through the Insolvency Service

If your employer is insolvent, you can claim unpaid wages, holiday pay, notice pay, and redundancy pay through the Government’s Insolvency Service. There are caps on the amounts you can claim, but this service ensures you receive some compensation.

Liquidation vs Administration


Liquidation means a company is closing down for good. If this happens, employees lose their jobs as soon as insolvency practitioners are appointed. The main goal here is to sell off the company’s assets to pay its debts. Employees become “preferential creditors” but may not get all the money owed to them. The government’s Insolvency Service can help fill some of the gaps, ensuring you get some form of payment for redundancy and unpaid wages​.


Administration is when a company is in trouble but tries to avoid closing down. An administrator takes over to save the business or sell it. You might keep your job in administration. Your job could be safe if the business survives or is sold. If you are made redundant, you still have rights to claim certain dues. The process might be complex, and getting money owed could take time​.

Applying for What You’re Owed

When an employer becomes insolvent, the insolvency practitioner will provide you with a CN number to claim your dues. It’s vital to apply within six weeks to ensure you receive your money promptly​.

Your Rights and Additional Steps

Even if your employer isn’t officially insolvent or you encounter issues claiming your dues, you can take additional steps, such as contacting HM Revenue and Customs or pursuing a claim through an employment tribunal​.

Seeking Benefits

  • Applying for Jobseeker’s Allowance: If your employer goes bust, it’s key to apply for Jobseeker’s Allowance (JSA) right away. JSA is there to help you while you look for a new job. Applying is straightforward: you can do it online or at your local Jobcentre Plus. Make sure you have your employment details and any savings information ready​.

  • Looking into Low-Income Benefits: Alongside JSA, check if you qualify for other low-income benefits. These can offer extra support during tough times. Benefits vary based on your situation, such as if you have kids or a low income. For details on what you might get, the website is a good place to start. It explains what’s available and how to apply​.

These steps are about more than just getting some money to help cover your bills. They’re also about giving you the space to find the right job next without having to rush into anything because you’re worried about money.

For more information, this booklet gives you an in-depth guide about your rights, debts, and pay from an insolvent employer.

Bottom Line

Facing an employer’s insolvency is challenging, but understanding your rights and the process for claiming owed money can alleviate some stress. By taking prompt action and exploring all available options, you can secure the financial dues owed to you and navigate through this difficult time.