1. ITV Report

What a consumer can do if a company goes out of business

Hundreds of flights with Go Ballooning have been cancelled Photo: Steve Parsons/PA Archive/Press Association Images

Wiltshire based hot air balloon company Go Ballooning has gone into liquidation, leaving thousands of customers wondering whether they'll be able to get their money back. We look at what action a consumer can take - according to the Citizens Advice Bureau - when a company goes into liquidation.

The action you can take depends on whether the business is a Limited Company, a sole trader or a partnership. In the case of Go Ballooning, it is a Limited Company - Cameron Flights (Southern) Ltd. A Limited Company may go into administration or liquidation (Go Ballooning have gone into liquidation.)

Once a company has gone into liquidation, you will have to negotiate with the appointed liquidators. If you've paid a deposit for goods that are not delivered or services that are not carried out, you are entitled to ask for your deposit to be returned. You should write to the liquidator enclosing proof. This could be a receipt, cheque stub or a credit card voucher. It is still unlikely that you will get your deposit back, however, as this depends on whether the company has enough assets to pay you.

You cannot insist that the liquidator sort out your problem if goods or services are unsatisfactory. What you can do is make a claim for compensation. Again, this will only be given if the company has assets left after the priority creditors have been paid in full.

The company may have a bonding scheme that covers customers in the event of it going into liquidation. This may be the case if the company is a member of the trade association. According to the Citizens Advice Bureau, for example, the Association of British Travel Agents will repatriate stranded travellers if their travel agency goes into liquidation.

If you'd like more information, you download the fact sheet from the Citizens Advice Bureau here.

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