How To Make a Claim Against a Company in Administration: A Guide for Creditors and Suppliers

It’s always stressful when a business you work with suddenly goes into administration. You might be a supplier waiting on invoices, or a creditor left in the lurch for thousands of pounds. Don’t worry - you’re not alone, and there are clear steps you can take.

Making a claim against a company in administration can seem daunting, but with the right advice you can protect your interests and maximise your chances of getting paid what you’re owed. In this guide, we’ll break down exactly what administration means, your rights and options as a creditor or supplier, and the step-by-step process for submitting a claim.

By the end, you’ll know how to approach this tricky situation legally and confidently. Let’s get started!

What Does It Mean When a Company Is In Administration?

If you’ve just found out that a business you deal with is “in administration”, you’re probably wondering what exactly that means for your claim.

Administration is a formal insolvency procedure under UK law, where an insolvent company is placed under the control of licensed insolvency practitioners (often called “administrators”). Their job? To try to rescue the company, or at least achieve a better outcome for creditors than an outright liquidation.

• If the company can be saved, administrators will work to restructure and get debts paid.
• If that’s not possible, they’ll realise (sell off) assets to repay creditors in a set order of priority.
• While a company is in administration, there’s often a “moratorium” - which means most legal actions against the company are paused. You can’t just sue or seize assets without the administrator’s permission.

So, if you’re owed money, you’ll need to submit a formal claim to the administrators and follow their process. Getting this step right is crucial if you want your voice (and your invoice) to be heard.

Who Can Make a Claim Against a Company in Administration?

Many people don’t realise just how wide the net is. You may have a valid claim if you are:

• A supplier - you’ve delivered goods or services but not been paid.
• A lender or investor - you’ve provided funds or credit facilities.
• Landlord or lessor - you lease property or equipment to the company.
• An employee - you’re owed wages, redundancy money, or holiday pay.
• A customer - you’ve paid a deposit or for goods not delivered.

The law splits claimants into different categories (secured creditors, preferential creditors, unsecured creditors, etc.), which affects the order in which you might get paid. Most everyday suppliers and trade partners are unsecured creditors - but don’t let that put you off, as following the process can still get you at least part of your money back.

If you’re unsure which category you fall into, or if you have a retention of title or security interest, now’s the time to get tailored legal advice. Learn more about company liability and asset protection for creditors.

What Are the Key Steps to Making a Claim?

Let’s walk through, step by step, how you can make a claim against a company in administration as a creditor or supplier.

1. Confirm That the Business Is in Administration

You may receive an official notice or see press coverage - but you can always confirm administration status by searching Companies House or checking for public statements from the administrators.

2. Wait for the Administrator’s Notice

Once appointed, administrators must quickly notify all known creditors (usually by post or email). You should receive a communication with details of the administration and steps to follow.

• If you haven’t received a notice, but think you’re owed money, contact the administrators directly using the details on Companies House.

3. Gather Your Evidence and Documents

It’s important to prepare your supporting documents. This could include:

• Invoices and purchase orders
• Contracts and delivery notes
• Proof of payment (if you’re claiming a deposit back)
• Retention of title clauses or security agreements (if relevant)

Accurate, clear records will make it much easier for administrators to verify and process your claim.

4. Complete a Proof of Debt Form

The administrator will usually send a “proof of debt” form (or tell you how to submit one online). This document records:

• How much the company owes you
• The nature of your debt (goods, services, loan etc.)
• Any security or priority rights you have
• Your bank/payment details for potential dividends

Follow instructions closely, attach all evidence, and return the form within any set deadline. Missing the window could mean you miss out entirely.

5. Monitor the Administration Process

Administrators must regularly update creditors. Stay in touch, monitor meetings and reports, and respond promptly if administrators request more information.

Depending on the case, you might be invited to vote on major decisions (like business sales or asset disposals) - being engaged can make a big difference.

6. Wait for the Final Distribution or Dividend

If assets are realised and a payout is possible, you’ll receive your share based on your claim and your creditor category.

• In most cases, unsecured creditors receive only a percentage of what they’re owed (sometimes as little as a few pence in the pound).
• Secured and preferential creditors generally get paid first.

It’s rarely a quick process - expect to wait months, sometimes longer for complex cases.

What Information Should Your Claim Include?

To make your claim as strong as possible, make sure your proof of debt is complete and persuasive. Here’s what to include:

• Company name (and number) in administration
• Your name and contact details
• Full details of the debt:
  • Amount owed
  • Date(s) incurred
  • Description of supplies/services
  • Relevant invoice numbers
• Copies of contracts or agreements
• Evidence of delivery, orders, or performance
• Bank details for future payment (as requested)
• Statement of any security or retention of title claim

Don’t forget to sign and date the form! Incomplete or poorly evidenced claims are more likely to be delayed or rejected.

How Are Claims Prioritised in Administration?

The administrators must follow a strict order (set by UK insolvency law) when distributing any money. Here’s a quick rundown:

• Secured creditors (with a fixed charge): e.g. banks with security over assets
• Preferential creditors: Mainly employees owed wages, select pension contributions
• Unsecured creditors: Most trade suppliers and smaller creditors
• Shareholders: Usually last in line, rarely receive anything

If you have a retention of title clause (where you retain ownership of goods until paid), or another security agreement, flag this clearly to the administrators when making your claim.

What If You Disagree With the Administrator’s Decision on Your Claim?

Administrators can accept or reject your proof of debt, sometimes only recognising part of what you’ve claimed. If you disagree, you can:

• Request clarification or further explanation (often administrators will work with you to resolve issues).
• Provide extra evidence to support contested amounts.
• Formally object to the final distribution schedule before it’s completed.
• As a last resort, apply to court to challenge the administrator’s decision, though this is rare and carries cost risks.

If things get contentious, or if the sums are significant, it’s wise to get advice from a lawyer experienced in insolvency and debt recovery. Learn about effective business debt recovery in the UK.

What Are the Common Pitfalls for Creditors and Suppliers?

Dealing with insolvency is rarely straightforward - here are some traps to avoid if you’re making a claim against a company in administration:

• Missing claim deadlines set by administrators
• Failing to provide proper supporting documents
• Not mentioning or substantiating your security interests (like ROT or fixed charges)
• Assuming you can just “take back” your goods or enforce debtor protections without the administrator’s consent
• Overestimating what unsecured creditors will recover - it’s best to be realistic

Careful claim preparation and ongoing engagement make all the difference. If this sounds overwhelming, don’t worry - a legal expert can guide you step by step so nothing slips through the cracks.

What Happens to Contracts and Agreements During Administration?

When a business enters administration, many contracts (including supply agreements, leases, and service contracts) are reviewed by the administrator. Sometimes these are “adopted” or continued; other times, they may be terminated or left in limbo.

If your company had an important contract or exclusivity agreement with the company in administration:

• Flag this contract in your proof of debt, and include it with your evidence.
• Administrators may ask you to continue supplying on revised terms - seek advice before agreeing.
• If you’re unsure of your rights if the contract is breached or “frustrated”, consult a lawyer promptly.

The way contracts are treated can affect your chances of payment, so don’t hesitate to secure tailored advice as soon as possible.

How Does Administration Compare to Other Insolvency Procedures?

It’s easy to mix up administration, liquidation, and company voluntary arrangements (CVAs). Here’s a quick overview:

• Administration: Goal is to rescue the company (if possible) or get the best return for creditors. Ongoing trading is sometimes allowed.
• Liquidation: The business is wound up and assets are sold. Creditors claim from the liquidation pot, but recovery rates are often lower than administration.
• CVAs: Agreement between a company and its creditors to pay off debts over time - not as drastic as administration or liquidation.

Each situation affects how, when, and if you’ll get paid. For more details, see our guide on what happens during a company liquidation.

Should You Get Legal Help for Administrative Claims?

You don’t always need a lawyer to make a straightforward claim - but if your situation is complex, the sums owed are large, or you have security interests or contract issues, getting advice is a smart move. Legal help is especially crucial if:

• You are unsure about your creditor status or the validity of your claim
• Your debt relates to ongoing contracts or disputed goods/services
• You believe the administrator’s process is unfair or unlawful
• Your security interests haven’t been recognised

A legal expert can ensure your claim is watertight, maximise your chance of recovering what you’re owed, and help you negotiate with administrators or other creditors. If you need help managing complex agreements or enforcing your rights as a supplier, Sprintlaw UK is here to guide you.

Key Takeaways: Making a Claim Against a Company in Administration

• Administration is a process aimed at rescuing an insolvent company or getting the best deal for creditors - but regular legal proceedings against the company are paused.
• Suppliers, lenders, employees, landlords and more can all make a claim, but you must follow the claims procedure set out by the administrators.
• Gather your evidence, complete the proof of debt form with all required details, and respond promptly to the administrator’s queries or instructions.
• Your claim will be ranked against other creditors according to UK insolvency law priority rules - understanding your status is crucial.
• If you disagree with a decision on your claim, or have contracts and security interests at stake, don’t hesitate to seek legal help.
• Be realistic about payment prospects: unsecured creditors often only recover a percentage of what’s owed, and the process takes time.
• Getting professional advice early increases your odds of a successful outcome and protects your legal rights in a complex situation.

If you’d like help navigating a claim against a company in administration, or if you want support preparing your documents and protecting your rights, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat. Our friendly experts are here to help you recover what you’re owed and guide you through each step.