When a limited company in the UK goes bankrupt … Do the creditors receive any money or do they lose out?

It’s a worrying time for creditors when a limited company goes bankrupt or enters an insolvency process. The biggest concern, particularly for the smaller unsecured creditors, is whether they will ever receive the outstanding debt owed to them. There is a predetermined order in which creditors are paid during the bankruptcy or insolvency process, according to the Insolvency Act 1986, which often means that unsecured lenders may very well lose out. 

When a limited company becomes insolvent and enters into a bankruptcy or insolvency procedure, a top insolvency company in the UK is instructed to handle the process. It is the instructed licensed insolvency practitioner from that company that liaises with the insolvent business’s creditors and arranges for them to be paid.