How to get a refund when a company goes bust

Start with the company's own record rather than rumour or a shopfront notice. ASIC's searchable registers include a company and organisation search and a published notices website where external administrators must advertise insolvency and external administration notices. Between the two you can establish, in minutes and at no cost, whether an appointment has been made, what kind it is and who the registered liquidator is. Take the exact legal entity name and ACN off your invoice, because the trading name over the door is frequently not the company that took your money.

Voluntary administration is the pause button. An independent registered liquidator takes control of an insolvent company to work out whether the business can be saved or whether creditors would do better in an immediate liquidation. The administrator has all the powers of the company and its directors, including the power to sell or close the business. Crucially for you, a moratorium falls over claims: ASIC states that unsecured creditors cannot begin, continue or enforce their claims against the company without the administrator's consent or the court's permission. A tribunal claim or a letter of demand achieves nothing during this period.

Liquidation is the wind-up. A liquidator takes control so the company's affairs can be wound up in an orderly and fair way, sells the assets, investigates why the company failed, pursues recoverable payments and distributes whatever is left in a statutory order. It starts either as a creditors' voluntary liquidation, initiated by the directors and shareholders, or as a court liquidation ordered after an application, usually by a creditor. A smaller company may be wound up under the simplified liquidation process, in which ASIC notes there can only be one dividend paid to unsecured creditors.

Receivership is the one that most often disappoints consumers, because it is not really about you. A secured creditor holding a security interest over the company's property appoints a receiver, who collects and sells enough of the secured assets to repay the debt owed to that secured creditor. ASIC is blunt about the consequences: the receiver's principal duty is to the appointing secured creditor, the duty owed to unsecured creditors extends only to taking reasonable care to sell secured assets for not less than market value, and there is no obligation to report to unsecured creditors at all.

A deed of company arrangement is the fourth thing you may hear about, and it is an outcome rather than an appointment. It is a binding arrangement between the company and its creditors governing how the company's affairs will be dealt with, usually approved at the second creditors' meeting as an alternative to winding up. The point to hold on to is that a deed binds all unsecured creditors, even those who voted against it. Sit the process out and you are still bound by whatever the room decides.

Then there is the case with no appointment at all. Plenty of small businesses stop trading, stop answering the phone and are eventually deregistered without any external administrator being appointed. If the ASIC search shows the company as registered and no notices exist, nobody has been put in charge, there is no proof of debt to lodge and no meeting to attend. That is a different problem, covered in the final section of this guide.

Finally, check what kind of legal entity you contracted with. A company has an ACN and appears on the ASIC registers described above. A sole trader or a partnership does not, and the company insolvency framework and ASIC's creditor guides do not apply to them; personal insolvency runs under a separate system administered by the Australian Financial Security Authority. If your invoice shows only an ABN and a person's name, searching for a liquidator will produce nothing.

Write to the external administrator as soon as you have the name, in writing even if you also phone. Set out the company's full legal name, your name and contact details, what you paid for, the amount outstanding and the dates, and attach the documents: the invoice or contract, the receipt or bank statement showing the payment, any order confirmation, and the correspondence in which the business promised delivery. Ask expressly to be recorded as a creditor and sent all circulars. Administrators work from the company's own books, and consumer deposits are the category most likely to be missing from them.

In a liquidation you will eventually be asked to lodge a formal proof of debt. This is a prescribed form setting out the details of your claim, including how the debt arose and the amount claimed, and it must be supported by evidence such as invoices. ASIC states that the liquidator gives at least 14 days' notice of the deadline for lodging the proof of debt, and that a claim can be rejected if the evidence is insufficient. If your claim is rejected the liquidator must give notice within seven days, and the rejection notice is the document you need before you can do anything about it.

In a voluntary administration the timetable is compressed and the meetings matter. ASIC sets out that the first creditors' meeting must be held within eight business days of the administrator's appointment, on at least five business days' notice, and that the meeting deciding the company's future must be convened within 25 business days of appointment, extended to 30 where the Christmas or Easter period falls inside the convening period. Before the second meeting the administrator must give creditors a report and a statement setting out an opinion on each option and a recommendation.

To vote you must lodge details of your claim with the administrator, and the chairperson decides whether to accept it for voting purposes. Voting is by a majority in number and value: a resolution passes when more than half the creditors voting are in favour, and creditors owed more than half the total debt at the meeting are also in favour. Rejection for voting purposes does not affect your entitlement to a dividend, and ASIC notes you can appeal to the court within 10 business days. Consumers are often the largest group by number and the smallest by value, which is why returning the proxy form matters even if you cannot attend.

You have information rights beyond the meeting itself. ASIC's guides record that creditors can request the external administrator give information, provide a report or produce a document about the administration, can resolve to appoint a reviewing liquidator to review the fees or costs incurred, and can form a committee of inspection to assist, advise and monitor the conduct of the administration. Committee members represent the interests of all creditors, not only their own, and cannot profit from the administration without approval.

Keep a single folder from day one. The same evidence bundle serves the proof of debt, a card chargeback, an insurance claim under a building warranty scheme, a complaint to a state fair trading agency and, if it comes to it, a tribunal claim. Assembling it once is the difference between four scrambles and one piece of work used four times.

The order of payment in a liquidation is statutory, and ASIC sets it out as a strict cascade: the costs and expenses of the liquidation including the liquidator's fees, then employee wages and superannuation, then employee leave entitlements, then employee retrenchment pay, and only then unsecured creditors. Each category must be paid in full before the next category is paid. Consumers sit in the last of those five tiers, alongside trade suppliers and landlords, and share whatever remains in proportion to the size of their claims.

Before that cascade begins, secured creditors take what their security covers. ASIC defines a secured creditor as one holding a security interest in some or all of the company's property, and a circulating security interest — formerly a floating charge — as one held over the company's circulating assets. In practice a bank with security over stock, plant and receivables can absorb most of what a failed retailer or builder had, and it does so before the waterfall reaches you.

The administrator's remuneration is the other deduction people underestimate. ASIC's fee guide states that the external administrator will generally be paid from the company's available assets before any payments are made to creditors. Fees must be approved by a resolution of creditors, by a committee of inspection, or by the court, and creditors can approve them by written notice without a meeting where a majority in number and value of those who responded voted yes and 25 per cent or less in value objected. Creditors can also seek a court review or appoint a reviewing liquidator.

That fee mechanism cuts both ways. It is the reason a liquidation of a company with no assets frequently produces nothing at all — ASIC records that an external administrator is sometimes not paid, or only partially paid, for the work they do. A liquidator is not obliged to incur expense on a winding up unless there are enough assets to cover their costs, so an estate with no realisable property tends to be wound up thinly and quickly, and no one is being obstructive when that happens.

There is one recovery avenue that occasionally works in unsecured creditors' favour. A liquidator can pursue payments made by the insolvent company that put one creditor in a better position than other unsecured creditors — an unfair preference, in ASIC's glossary, referring to payments in the six months before the liquidation. Liquidators can also investigate possible misconduct by the company's officers and report it to ASIC. Receivers do neither of those things, which is one reason ASIC describes liquidation as potentially more beneficial to unsecured creditors than receivership.

Nobody will promise you a percentage, and you should be wary of anyone who does. ASIC's own guide states no likely recovery rate for unsecured creditors, noting only that the liquidator assesses the likelihood of creditors receiving a dividend. The statutory report the liquidator must provide within three months of appointment is the first document that says anything useful about whether a dividend is in prospect.

Timing is the last thing to absorb. Notice of a liquidator's appointment is given within 10 business days in a voluntary liquidation and up to 20 in a court liquidation; the statutory report follows within three months; the call for proofs of debt comes later; and any dividend comes after that. In a simplified liquidation there is only one dividend to unsecured creditors, so there is no second bite.

The first call is your bank, not the administrator. Where you paid by credit or debit card, a chargeback is raised by your bank against the merchant's bank under the card scheme rules, so it does not depend on the failed company having any assets and is not affected by the moratorium in an administration. The ACCC's own advice to consumers whose supplier has gone bust puts contacting your bank ahead of registering as a creditor, and this site has a separate guide to running a chargeback.

The insolvency-specific point is about sequencing. Chargeback windows are counted in months from the transaction or from the date delivery was due, while insolvency processes are counted in quarters. If you wait for the administrator's first circular before deciding whether to dispute the transaction, you may already be outside the window. Raise the chargeback on the day you learn of the appointment, tell the bank the merchant has entered external administration and name the appointment, and give the date on which the goods or services were due.

You are not choosing between the two remedies. Lodge the proof of debt and raise the chargeback. If the chargeback succeeds, tell the external administrator and reduce or withdraw your claim to the extent you have been repaid, because you cannot be paid twice for the same loss. If the chargeback fails, the proof of debt is still live and nothing has been given up.

Where you paid through PayPal, a buy now pay later provider or a similar intermediary, that provider has its own dispute process on its own timetable and holds the commercial relationship with the merchant, so raise it there first. Where the intermediary funded the purchase with a card, a chargeback may also be available behind it. Where you paid by bank transfer, PayID or BPAY there is no equivalent reversal, which is the practical reason deposits should go on a card.

If a bank, insurer or credit provider says no, that decision is itself reviewable. The Australian Financial Complaints Authority considers complaints about financial firms, including chargeback decisions and insurance claim declines, at no cost to the consumer, and it expects you to have complained to the firm first and given it an opportunity to respond. That is a separate route from the insolvency and is not affected by the collapsed company's position, because your complaint is about the financial firm's conduct rather than the merchant's.

One more source of money outside the estate is worth checking before you assume it is all gone: any travel insurance or purchase protection attached to the card or policy you used. Travel policies in particular sometimes respond to supplier insolvency and sometimes expressly exclude it. Read the product disclosure statement for the word insolvency rather than assuming either way.

Residential building work is the one area of consumer spending where Australia has built a genuine safety net for insolvency, and it is administered separately in every state and territory. The cover is compulsory insurance that the builder takes out for the homeowner's benefit above a contract value threshold, and it responds precisely when the builder cannot: on death, disappearance or insolvency, and in some jurisdictions on loss of licence. If your builder has collapsed mid-job, this claim, not the liquidation, is the one that pays.

In New South Wales, home building compensation cover is required for residential building contracts valued at $20,000 or more, and the builder must give you a certificate of cover before asking for payment. Claims arise where loss flows from incomplete or defective work and the contractor has become insolvent, has died, has disappeared, or has had their licence suspended for failing to comply with a compensation order. NSW guidance is explicit that a deposit is protected only up to 10 per cent of the contract price. The State Insurance Regulatory Authority runs an HBC Check tool that confirms cover by address, certificate number or contractor.

In Victoria, Consumer Affairs Victoria states that domestic building insurance was required above a $16,000 contract value, and that from 1 July 2026 the threshold moved to $20,000 under the new Home Warranty scheme. Cover for repairs runs to $300,000 under domestic building insurance and $400,000 under Home Warranty, and a claim for incomplete work may be limited to 20 per cent of the contract price. Policies issued after 1 July 2015 also respond where a builder fails to comply with a final VCAT or court order. The deadline is the part to write down: submit the claim within 180 days of learning about the builder's insolvency.

In Queensland the scheme is public rather than privately underwritten. The Queensland Home Warranty Scheme covers most residential building work valued above $3,300 including materials, labour and GST; the contractor pays the premium based on the insurable value and the homeowner pays for any additional cover; and the standard policy provides maximum cover of $200,000. QBCC handles non-completion and defective work claims directly, so the claim and the regulator are the same body, which makes the Queensland path simpler to navigate than the insurer-mediated schemes.

The other five jurisdictions run their own equivalents under their own names: home indemnity insurance in Western Australia, building indemnity insurance in South Australia, residential building work insurance in Tasmania, and the residential building insurance and fidelity certificate arrangements in the Australian Capital Territory and the Northern Territory. The structure is the same in each — compulsory cover above a contract value, triggered by the builder's death, disappearance or insolvency — but the threshold, the cap and the claim deadline differ, and none of those five publish their figures on a page this guide was able to verify. Confirm the numbers with the building regulator in your jurisdiction before relying on them.

Two traps recur across the schemes. The first is paying ahead of schedule: a builder in trouble will often ask for the next progress payment early, and money paid outside the contract stages is the money a scheme is least likely to return. The second is the threshold. Work below the contract value threshold carries no compulsory cover at all, which is why Consumer Affairs Victoria's advice for uninsured work is to contact the administrator or liquidator and lodge as an unsecured creditor, and to ask a credit card provider for a chargeback.

Whichever jurisdiction you are in, do not terminate the building contract on your own initiative before taking advice. Schemes generally require the contract to have been properly ended, or the insolvency established, before a claim is accepted, and a homeowner who walks away first can create the very default that defeats the claim. The regulator's information line is free: Consumer Affairs Victoria runs a Building Information Line on 1300 55 75 59, and QBCC takes homeowner enquiries on 139 333.

Gift cards carry strong rules and a weak position in insolvency, and the two facts sit awkwardly together. Under the Australian Consumer Law, gift cards supplied after 1 November 2019 must be valid for at least three years from supply, the expiry must be prominently displayed, and post-supply fees such as activation, account-keeping and inactivity charges are prohibited. Reloadable cards, promotional vouchers and loyalty cards are treated differently. None of that survives an insolvency: the ACCC states that when a company becomes insolvent, gift card holders become unsecured creditors with no guaranteed recovery.

What actually decides the fate of a gift card is how the business is sold. Where the business changes hands as a going concern, or through a purchase of the company's shares, the new owner must honour existing cards. Where the business simply closes, the cards generally lose their value unless a remedy is negotiated. In the middle sits the administrator's discretion during an administration, and the ACCC records the pattern that has become common practice: administrators may honour gift cards only if the holder spends an equivalent amount of new money at the same time.

Lay-by is on a different footing because the law addresses termination directly. The ACCC sets out that a consumer can cancel a lay-by agreement at any time and receive a refund of what they have paid, less a reasonable termination charge, and that a business can only cancel a lay-by where the consumer has breached the terms, where the business stops trading, or where the products become unavailable. A business ceasing to trade is therefore a recognised cancellation event, and the amounts you have paid become a debt owed to you — which, in an insolvency, lands you back among the unsecured creditors.

Deposits and part-payments for goods never delivered are the largest category of consumer loss in these collapses, and also where the law is clearest in principle. The ACCC states that it is against the law for businesses to take payment for products or services when they know they will not be able to supply them, and that a business must not accept payment where it does not intend to supply, or knows or should know it cannot supply by the promised date. Where a business kept taking deposits in the weeks before an appointment, that conduct is worth reporting, even though reporting will not by itself return your deposit.

Prepaid services — gym memberships, multi-visit passes, course fees, prepaid maintenance plans — are legally the same as an undelivered good and practically worse, because there is rarely anything physical to recover and sell. Cancel any direct debit or recurring card authority immediately rather than waiting for it to stop, and tell your bank in writing that the merchant has entered external administration so further debits are blocked as well as reversed. Where a competitor takes over the member list, honouring your remaining term is a commercial choice unless the business was bought as a going concern.

Prepaid travel is the one consumer category with a purpose-built structural protection, and it is worth understanding what it is and is not. Businesses accredited under the travel industry's national accreditation scheme must hold client travel payments in separate accounts so that the money is used only for the customer's travel arrangements rather than mixed with the business's operating funds, must carry professional indemnity and public liability insurance, and are reassessed annually. Money genuinely held in a separate client account is not part of the collapsed business's assets. The scheme is not, however, a compensation fund, and it does not guarantee a refund.

For flights and packaged travel, your consumer guarantees run against whoever supplied the service, and the ACCC's position is that a travel service must be supplied within a reasonable time, with a replacement service or a refund due when it is not. If the airline or tour operator itself has collapsed, that guarantee is worth what the estate is worth. If the agent has collapsed but the airline has not, chase the airline and the client account first, because that is where the money most likely still is.

If the ASIC search shows no external administrator, you are not dealing with an insolvency yet; you are dealing with a business that will not pay. That is better news than it sounds, because the moratorium that blocks claims during an administration does not exist, and the ordinary consumer machinery is available. Send a written demand with a firm deadline, then take the dispute to your state or territory consumer protection agency. The ACCC directs consumers to their state consumer protection agency first, to an industry ombudsman where one covers the sector, and to the small claims court or tribunal as the enforcement step.

State and territory agencies conciliate and their letters carry weight that a customer's letter does not: NSW Fair Trading on 13 32 20, Consumer Affairs Victoria, the Queensland Office of Fair Trading, Consumer Protection in Western Australia, Consumer and Business Services in South Australia, Consumer Building and Occupational Services in Tasmania, Access Canberra, and NT Consumer Affairs. The tribunals behind them — NCAT, VCAT, QCAT and their equivalents — hear consumer claims cheaply, informally and without lawyers, and a tribunal order is an enforceable debt rather than a request.

Be realistic about how a tribunal order interacts with an insolvency. If the company enters administration or liquidation before you enforce, your order becomes a claim in the estate ranking exactly where it would have ranked anyway. That is the argument for moving quickly rather than thoroughly: a conciliated refund from a struggling business in March is worth far more than a perfectly reasoned determination in October against a company that has since collapsed.

Report the conduct to ASIC where directors have behaved badly, but understand what reporting achieves. ASIC receives reports and tip-offs confidentially and uses them to identify systemic problems and to take action where the harm is significant, and it states in terms that it does not intervene in disputes, resolve complaints, give legal advice or act to get your money back. The same is true of the ACCC, which uses reports to guide education, compliance and enforcement work and does not resolve individual disputes about failures to supply. Report for the pattern, not for the refund.

The pattern most worth reporting is phoenix behaviour: the same people, premises, trading name and website, operating through a new company while the old one is wound up owing customers their deposits. Note the ACNs of both entities, keep the advertising and correspondence, and say so plainly in the report. Liquidators investigate the company's failure and report possible offences to ASIC, and creditor evidence is part of what they work from.

Finally, get free help rather than paying for it. Financial counsellors through the National Debt Helpline on 1800 007 007 are free, independent and confidential, and are the right call if the loss has left you unable to meet your own commitments. Community legal centres and Legal Aid can advise on tribunal claims. Nobody who charges a fee to lodge a proof of debt or chase an administrator is offering something you cannot do yourself in an afternoon, and the fee will usually exceed the dividend.