What happens for DCA claims if the company goes into administration

Spotk

Give of the continued delaying of the redress scheme due to challenge and speculative press about Blue Motor Finance, what if any protection is there for consumer claims if the company does go into administration prior to settling claims? Potentially a real risk that they will push the button straight after the court hearing in the autumn. Particularly interested in the scenario that they went into administration and they get taken over - is the new owner liable or would they lose liability through the administration process given DCA’s are non-primary creditors?

MyRealNameToo

You will be an unsecured debtor of the company and the administrators will consider your claim once the higher ranking debtors are paid depending on if there are enough funds left to pay it.

If someone buys the company itself then yes, the company would still have to pay it but insolvent companies arent popular things to buy and instead most the time people buy the assets of the company not the company itself. Those funds are then used to repay debtors and in the unlikely event of it raising enough money to cover all debts any remainder goes to the shareholders.

MattMattMattUK

If they go into administration then you would become an unsecured creditor, so pennies in the pound at best. No one is going to take them over, they would buy the assets and leave the liabilities in the business that is in administration, with a small or zero payout to unsecured creditors from the funds paid for the assets.

In reality there are going to be several lenders who go into administration because of this, those people will not get a payout of anything more than pennies in the pound.

born_again

Look on the bright side, you can now go direct to finance co & get 100% of any payout. Rather than paying leaches.