AnswersWhen a client goes under
The liquidator wants me to repay money the company paid me. Can they do that?
The short answer
Only through the court. Their letter is a request, not an order, and the usual claim is that a payment put you ahead of other creditors2 in the six months before the winding up began3, when the company could not pay its debts. The liquidator must also show it meant to favour you; that is presumed only if you are connected, and then the window is two years. But in a court winding up, a payment after the petition is void unless the court orders otherwise7.
England and Wales only. WolfX is software, not a law firm.
What you can add
A £7,200 payment, 39 days before liquidation
Say a design studio invoiced another business £7,200, due on 15 June 2026. The client paid on 14 August 2026. On 22 September 2026 the client goes into creditors' voluntary liquidation, and the liquidator asks for the £7,200 back. The six months ending with 22 September 20263 start on 23 March 2026, so the payment, 39 days before, is inside the window. For a connected person the window would start on 23 September 2024. The 5p in the pound is an illustration, not a forecast.
Asking for the grounds first costs one letter. Paying first costs £6,840 if the claim would have failed on the dates or the tests.
The road ahead
Six steps. Reply first, pay later.
Step 1: Read the three dates
Note the day you were paid and the day the winding up began: the resolution date9, or the day the petition was presented8 if a court wound it up. If liquidation came straight after administration, use the day it entered administration3.
The payment must fall in the six months ending with that day3, or two years if you are connected6. A payment after the petition is void unless the court orders otherwise7, whatever the company meant: see an insolvency solicitor now.
Step 2: Work out which claim it is
A supplier paid an invoice usually faces a preference: a creditor paid ahead of the others2. A transaction at an undervalue1 is a gift, or a sale far below value, and has a good-faith defence.
A payment that cleared a debt a director had given a personal guarantee for gets a close look, because the law names a guarantor among those who can be preferred2.
Step 3: Reply in writing, and pay nothing yet
Send the letter below within a few days. It admits nothing and asks for the grounds. A liquidator who hears nothing can still apply to the court2.
Step 5: Take advice if the sum is large or the dates are close
Use an insolvency solicitor. If the liquidator offers to settle for less than the demand, decide that with the solicitor, not on the day the offer arrives.
Step 6: If a court orders repayment, claim the old debt
The order can let you prove for the old invoice in the liquidation4, as an unsecured creditor, usually far back in the queue. Here is how to make that claim.
A personal guarantee backing that invoice can be revived by the same order4.
A letter you can copy
Reply to the liquidator asking for the grounds
Send it within a few days of the liquidator's letter, before you pay anything or agree to anything.
Tap a highlighted gap to see what goes in it.
Send it by email to the address on their letter, and keep the sent copy. If their letter came by post, post a copy too and note the date.
When not to bother
When it isn't worth it
- The sum is small and a settlement is on offer. Fighting a claim that costs more in fees than it asks is a bad trade; ask for the offer in writing and weigh it against what advice would cost.
- The dates and the facts plainly sit against you. If the payment is inside the window, the company was clearly insolvent and the liquidator can show it meant to put you first2, argue about terms: ask in writing for time to pay.
- You were paid on the day for what you handed over. That is an exchange, and a preference starts with someone who is a creditor of the company2; say so in your reply and ask what the liquidator relies on.
- The company or the liquidation is in Scotland or Northern Ireland. These sections cover England and Wales; the route differs elsewhere, so take advice there.
The Wolf's note
A liquidator's letter reads like a ruling. It is a request, and only a court can turn it into an order. Ask for the grounds in writing, then let the dates do the talking.
Mr. Wolf · the AI inside WolfX
What comes next
Your next move
How do I claim money from a company in liquidation?
Send the liquidator a proof of debt before their last date: a letter or form with the amount owed including VAT, how it arose and your invoices.
7 min read · Letter included
Who gets paid first when a company can't pay its debts?
Suppliers come near last.
6 min read
Don't want to do this yourself?
The Wolf does every step for you. He works out the sums, writes the letters and keeps track of every date. Nothing goes without your yes.