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What debts are written off on liquidation?

The Quick Answer

The following liabilities (also called unsecured creditors) are written off on liquidation:

  • Trade suppliers.
  • Utilities.
  • VAT.
  • PAYE.
  • Corporation tax.
  • Unsecured bank debt like Bounce Back Loans.
  • Business Rates.
  • Employee claims including arrears of pay, redundancy and tribunal claims.

The debts not written off by liquidation include:

  • Secured debts such as hire purchase.
  • A debenture as the lender has security on the company assets.
  • Debts you have personally guaranteed such as a bank overdraft.

The answer in more detail

Although liquidation brings the company to an end the unsecured creditors can still claim on the company assets that are left. They can claim after secured and preferred creditors and expect to get a payment equally from what is left.



If you need insolvency advice the earlier you talk to someone like us the better as you will have more options. We can help, contact us today.

More questions in this section

David Kirk


David Kirk ACA FABRP

We have just worked with Kirks to complete the closure of our company. Everything went smoothly and professionally. I would recommend this firm and the staff who were very very helpful and quickly finalised everything. Thank you Kirks.
Carol Hill



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David Kirk

Licensed Insolvency Practitioner