When a business goes bust

Consumers can be left out of pocket when a business goes bust. For any queries or complaints regarding an insolvent company, you should contact the appointed external administrator.

Insolvent companies

An insolvent company is one that is unable to pay its debts when they are due. The three most common insolvency procedures are voluntary administration, liquidation and receivership.

Insolvency notices are published in newspapers or can be found on ASIC's insolvency notices website.

As a consumer, it's important to know your rights if a company becomes insolvent and goes into external administration.

External administrators

External administration is a term which covers all types of insolvency arrangements. An external administrator is also known as:

  • insolvency practitioner
  • voluntary administrator
  • liquidator
  • receiver.

Notices advising of most appointments of external administrators are published in newspapers or on the administrator's website.

The Australian Securities and Investments Commission (ASIC) provides contact details of external administrators.

Your local state and territory consumer protection agency might also have information about the appointment of external administrators for insolvent companies.

Consumers as unsecured creditors

You will be affected by the appointment of an external administrator and may become an 'unsecured creditor' if you have:

  • paid in full for goods or services to be collected or delivered later
  • paid a deposit, such as in a lay-by agreement or interest-free offer
  • bought a gift card or voucher and have not used it
  • returned a product and been issued a credit note.

When will I be paid back?

The Corporations Act 2001 determines the order in which the external administrator has to repay money owed by a company to certain creditors. Consumers will generally be ordinary unsecured creditors and will only be paid after monies owing to other classes of creditors, such as employees and shareholders, have been repaid.

Payments made on credit

Where you have paid for a product or service by way of a credit arrangement (credit card or loan) and the product or service does not arrive because the company has gone into external administration, you may be able to request a chargeback on the transaction from your financial institution or bank that issued the credit card. You should make this request as soon as possible as there may be time limits on chargeback claims.


Some states and territories have programs in place where consumer losses in specific industries may be redressed through a compensation fund or similar arrangement. In some instances you may be able to apply for compensation where a company is insolvent.

The company is still trading

During a period of external administration companies often continue trading under the control of the external administrator.

If the external administrator has announced that the company will honour specific offers or transactions – such as gift cards or lay-bys – you should follow the directions given by the administrator.

The company has stopped trading

If the company ceases trading, you will need to register with the external administrator as an ordinary unsecured creditor to recover your money. The insolvency process will determine whether you receive the goods paid for, a full or partial refund, or possibly nothing at all.

Guarantees and warranties

If you are concerned about guarantee or warranty claims on goods purchased through the company, you should contact the external administrator.

If the external administrator won't help you

Contact ASIC on 1300 300 630.

More information

Insolvency overview