If your tradesperson goes out of business

If you’re halfway through a big home improvement project, you expect the tradesperson you hired to see it through to the end. While this is usually the case, in rare instances the person or company you hired can go out of business during your job, potentially leaving you without the expected support.

This guide explains what you can do if your tradesperson goes out of business before your project is completed.

##If the tradesperson goes out of business mid-project When you discover that your tradesperson is no longer operating and work on your job has stopped, it is important to take stock of the progress and understand the financial implications.

If you have just paid your deposit and work has not yet started or has only just begun, you will want to take steps to reclaim your money.

Similarly, if you paid the tradesperson for materials that were never delivered, you will want to get either the materials you paid for or a refund.

If you are midway through a project and have been making staged payments, then you may have received a fair amount of work for what you have paid so far – in which case, you may want to find another tradesperson to continue the work.

##If the tradesperson is a sole trader Many tradespeople operate as sole traders, meaning they are the sole owner of their business and bear its liabilities.

It is useful to establish if the tradesperson has actually gone out of business – in some rare situations, a person may use this as an excuse to avoid their obligations.

You can check whether a sole trader or partnership has ceased trading by consulting the insolvency register.

If they have, and you have been left out of pocket, you can contact the receivers handling the bankruptcy and ask to be made a creditor – making a claim for money paid, minus the value of work and materials provided.

However, it is unlikely that you will be high on the list of those owed money, and there is no guarantee that you will recover your money through this process.

##If the tradesperson has a limited company Some tradespeople operate limited companies, a business structure that makes the company its own legal entity, separate from its owners (shareholders) and managers (directors) – even if the tradesperson is the sole shareholder and director.

If the tradesperson you hired operates through a limited company, you can check whether the company has entered administration via Companies House.

If the company is in administration, then as with sole traders, you can apply to the administrators to be made a creditor and hope that the money will be recovered through this process.

##Other ways to reclaim money If you paid by credit card for any of the work, you may be able to make a claim under Section 75 of the Consumer Credit Act, which can result in a refund.

If you paid by debit card, you could also try to use the Chargeback scheme, a consumer protection operated by card providers. You generally have 120 days to make a claim, which can be for any amount.