Client gone bust and owes you money? What freelancers can do (US, UK, Canada)

A client stops paying, then you hear they've gone bankrupt, into liquidation or into administration. Can you still chase them? How do you claim, and what should you send? Here's a plain answer, with what the UK Insolvency Service, the US courts and Canada's Office of the Superintendent of Bankruptcy actually say.

General information, not legal or financial advice. Not written or reviewed by a lawyer, an accountant or an insolvency practitioner. The tables of steps, the claim checklist, the side-by-side summary and all the wording to copy are ours; the official items come from the UK, US and Canadian government pages linked below. They are general rules for anyone owed money in a formal insolvency process, and none of them is a freelance law. The UK pages are about England and Wales; Scotland and Northern Ireland, US state law, Canadian provincial law (including Quebec) and other countries were not checked. Official pages were read on 2026-10-16.

The short answer

1. Check first. A client who is late or silent isn't necessarily insolvent. The UK and Canada have official records to search; in the US, watch for the court's notice.
2. Once a formal case has started, stop chasing the client. The official pages in all three countries say creditors generally can't start or continue legal action against them, and the US page adds phone calls demanding payment.
3. Contact whoever is handling the case (an official receiver, trustee, liquidator or Licensed Insolvency Trustee) and tell them what you're owed.
4. File the claim they ask for, on time, with copies of your contract and invoices and a statement of what's still owed.
5. Expect little or nothing back, often after a long wait. In the UK and Canada, unsecured creditors (where an unpaid freelancer usually sits) are paid after costs and preferred claims; in the US, most liquidation cases of individuals have no assets to share.
6. Keep your contact details up to date with the case, and look at the tax side: an unpaid invoice may count as a bad debt.

On this page

• 1. Insolvent, or just late?
• 2. How to check for an insolvency case
• 3. Stop chasing once a case starts
• 4. UK: register as a creditor and prove the debt
• 5. US: bankruptcy and the proof of claim
• 6. Canada: the proof of claim
• 7. What you might get back
• 8. Payments just before the case
• 9. Side by side
• 10. What to put in your claim
• 11. Step by step
• 12. Wording to copy
• 13. Checklist
• Free tools and kits
• Where the sources differ
• When to get advice
• Related
• Sources

1. Insolvent, or just late?

"If you’re owed money, you’re a creditor of the person or company that is in debt to you." "A person or company is ‘insolvent’ if they can’t pay their debts." (Insolvency Service: if an insolvent company or bankrupt person owes you money, page date 2025-01-09).

Not being able to pay is not the same as being in a formal case. If there's no bankruptcy, liquidation or similar case, you're dealing with a late payer: follow our guide to chasing an unpaid invoice, and its section on small claims and court. If the client says the work is wrong rather than that they can't pay, see client disputes your invoice.

The Insolvency Service also says: "If the insolvent person is not in bankruptcy proceedings, you can apply to bankrupt them to try to get your money back. To try to get money back from an insolvent company that is not in liquidation, you can apply to wind the company up." (Insolvency Service: detailed guidance for creditors, page date 2025-01-09). That is a court process; get legal advice before you consider it.

2. How to check for an insolvency case

• UK (England and Wales): "You can find which individuals or companies are in formal insolvency proceedings, and who is dealing with the case, by searching:"
  • the Individual Insolvency Register if the individual is bankrupt or has a debt relief order
  • the Companies House service if it’s a company liquidation or administration
  (Insolvency Service). The detailed guidance: "If you believe an individual or company may be subject to insolvency proceedings and no one has contacted you, you can confirm the insolvency by:"
  • searching Companies House (for a company insolvency)
  • searching the Individual Insolvency Register (for a bankruptcy of an individual or an individual member of a partnership)
  • contacting the insolvency enquiry line
  • checking the public notices sections of The Gazette
  (Insolvency Service). On the register: "You can search for details of people who have gone bankrupt or signed an agreement to deal with their debts in England and Wales." "You can search the Individual Insolvency Register by name or trading name (for sole traders)." "Records are usually removed within 3 months of an insolvency case ending." "In Scotland, you can search the Register of Insolvencies." (GOV.UK: search the bankruptcy and insolvency register, page date 2015-03-19).
• US: the court writes to the creditors the debtor names: "The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor." (US Courts: Chapter 7 - Bankruptcy Basics, no page date shown). Make sure the client has your current address. We didn't check how to search US court records for a case.
• Canada: "The easiest way to find out if a person or a business has declared bankruptcy is to do an online search of bankruptcy and insolvency records." "After a bankruptcy has been filed, the LIT will send you a notice of bankruptcy as well as a list of creditors and the amounts of their claims." (Office of the Superintendent of Bankruptcy: you are owed money, bankruptcy, page date 2015-11-30). The search is a paid service on that page; we haven't used it.

Our tip: search for the client's exact legal name, and for a sole trader their own name too, not just the brand on your invoices.

3. Stop chasing once a case starts

• UK: "Unsecured creditors can’t take action against a bankrupt or company after the date of an insolvency order without the court’s consent. After obtaining consent, they must submit any claim to the trustee or liquidator." (Insolvency Service).
• US: "As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments." (US Courts: Chapter 7). In a reorganization: "The automatic stay provides a period of time in which all judgments, collection activities, foreclosures, and repossessions of property are suspended and may not be pursued by the creditors on any debt or claim that arose before the filing of the bankruptcy petition." (US Courts: Chapter 11 - Bankruptcy Basics, no page date shown).
• Canada: "As soon as the debtor is declared bankrupt, creditors can no longer start or continue legal proceedings against the debtor without the Court's permission." (Office of the Superintendent of Bankruptcy).

Our reading: pause reminder emails, late fees and any court claim, and write to whoever handles the case instead. If you already started a court claim, ask a lawyer what happens to it.

4. UK: register as a creditor and prove the debt

• When: "Register as a creditor if a person or company owes you money and the court issues them with a bankruptcy or winding-up order." "When you register, you’ll be added to the list of creditors (people who are owed money). You’re not guaranteed any payment, but you’ll be:"
  • kept informed about the case
  • allowed to vote on decisions at any creditors’ meetings
  (GOV.UK: register as a creditor in a bankruptcy or liquidation, page date 2015-09-21).
• How: "Contact the person who’s handling the case and tell them you’re owed money." "If you’re owed more than £1,000 you’ll need to submit a ‘Proof of Debt’ form." "If you’re owed £1,000 or less, you need to give the person handling your case your contact details and tell them how much you’re owed." (GOV.UK).
• Who to contact: "Your case will usually be handled by a court official who deals with bankruptcies and liquidations, known as an ‘official receiver’." "They might hand the case over to an insolvency practitioner - a lawyer or accountant who specialises in debt recovery." (GOV.UK). "If we have not contacted you, but you know an individual is bankrupt or a company is in compulsory liquidation, contact the official receiver (who works for the Insolvency Service). We’ll add you to the list of creditors and send you a report." "Contact the insolvency practitioner if you have not been contacted and an insolvency practitioner is dealing with the bankruptcy, or the company in:"
  • administration
  • voluntary liquidation
  • compulsory liquidation
  (Insolvency Service).
• After you claim: "If we know you’re a creditor in a bankruptcy or compulsory liquidation, we’ll send you a report. If there are assets, we might ask you to complete a ‘proof of debt’." "When the OR or IP receives your proof of debt form they will add you to the list of creditors and include you on future correspondence about the case." "We’ll usually send out a report to creditors after we’ve finished our initial enquiries. This can take up to 12 weeks." "This report tells you:"
  • when the bankruptcy or insolvency order was made
  • what assets we know the person or company has
  • what liabilities (or debts) the person or company has
  • the circumstances that led to the insolvency, if known
  • if we think there will be any money that can be paid to creditors
  (Insolvency Service; Insolvency Service). "If you have any further information about the assets of the individual or company, or about the conduct of the individual or company directors, write to the OR/IP." "Always make sure the OR or IP has up-to-date contact details for you." (Insolvency Service).
• Partnerships and LLPs: "If the partnership you are owed money by is a limited liability partnership (the letters LLP will appear at the end of the name) the individual partners, like company directors, have no personal liability." (Insolvency Service).
• Scotland: "Creditor claims are different in Scotland - see the Accountant in Bankruptcy website." We didn't check the Scottish or Northern Irish rules.
• What the Insolvency Service can't do: "The Insolvency Service and OR’s can only provide information about the administration of your case and cannot offer legal advice." (Insolvency Service).

The detailed guidance says: "This guidance describes how you make the claim when an individual has gone bankrupt or a company has gone into compulsory liquidation." For administration and voluntary liquidation, the Insolvency Service page above only says to contact the insolvency practitioner; we didn't check those processes further.

5. US: bankruptcy and the proof of claim

• Liquidation: "This chapter of the Bankruptcy Code provides for "liquidation" - the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors." "Most chapter 7 cases involving individual debtors are no asset cases." "In the typical no asset chapter 7 case, there is no need for creditors to file proofs of claim because there will be no distribution. If the trustee later recovers assets for distribution to unsecured creditors, the Bankruptcy Court will provide notice to creditors and will allow additional time to file proofs of claim." (US Courts: Chapter 7). "A creditor holding an unsecured claim will get a distribution from the bankruptcy estate only if the case is an asset case and the creditor files a proof of claim with the bankruptcy court." (US Courts: Process - Bankruptcy Basics, no page date shown).
• Reorganization: "A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time." "Generally, any creditor whose claim is not scheduled (i.e., listed by the debtor on the debtor's schedules) or is scheduled as disputed, contingent, or unliquidated must file a proof of claim (and attach evidence documenting the claim) in order to be treated as a creditor for purposes of voting on the plan and distribution under it." "It is the responsibility of the creditor to determine whether the claim is accurately listed on the debtor's schedules." (US Courts: Chapter 11).
• The form: the proof of claim is Official Form 410 (US Courts: Official Form 410, Proof Of Claim; the form page says "Updated on April 1, 2025"). Its instructions: "These instructions and definitions generally explain the law." "Proof of claim: A form that shows the amount of debt the debtor owed to a creditor on the date of the bankruptcy filing. The form must be filed in the district where the case is pending." "Creditor: A person, corporation, or other entity to whom a debtor owes a debt that was incurred on or before the date the debtor filed for bankruptcy." "Fill in all of the information about the claim as of the date the case was filed." "Attach redacted copies of any documents that show that the debt exists, a lien secures the debt, or both." "Do not attach original documents because attachments may be destroyed after scanning." (US Courts: Instructions for Proof of Claim (PDF)).
• Privacy on the form: "A Proof of Claim form and any attached documents must show only the last 4 digits of any social security number, individual’s tax identification number, or financial account number, and only the year of any person’s date of birth." (US Courts: instructions). Check your invoices before you attach them: a freelancer's invoice may show a tax number or bank account.
• Get advice: "You should consider obtaining the advice of an attorney, especially if you are unfamiliar with the bankruptcy process and privacy regulations." (US Courts: instructions).

Deadlines are set for each case and are on the court's notice; read it as soon as it arrives. We didn't check state-law collection rules or assignments for the benefit of creditors.

6. Canada: the proof of claim

• What happens: "In a bankruptcy, people or companies ("debtor") who can no longer pay their debts give all of their non-exempt property to a Licensed Insolvency Trustee (LIT) who then sells it and distributes the money to creditors." (Office of the Superintendent of Bankruptcy). This is under the federal Bankruptcy and Insolvency Act.
• What you must do: "To recover money owed to you, you must complete and submit a Proof of Claim to the LIT." "You must attach a Statement of Account providing the details of the claim along with supporting documents or other evidence that establishes the validity of your claim." "If your Proof of Claim is disallowed, you have 30 days to appeal the decision to the Court." (Office of the Superintendent of Bankruptcy).
• Filling in the form (Form 31): the debtor is "The full legal name of the debtor, or the full legal or trade name of the debtor corporation." The amount is "The full amount, in Canadian dollars, the debtor owes the creditor on the date of the proceedings, minus any counterclaims to which the debtor is entitled." "If the amount owing was payable in a currency other than Canadian dollars, it should be converted to Canadian dollars at the rate provided in the proposal." "If there is no specified rate, use the exchange rate on the filing date provided above." "Attach supporting documents to provide all relevant details to prove the claim. This allows the LIT to examine the claim and decide whether to allow it." "Include all relevant details about the debt or obligation, e.g., the nature and history of the claim, how and when the debt or obligation was contracted, etc." "List all payments received from the debtor and credit extended to the debtor during the designated period." "The creditor’s mailing address must be given to allow the LIT to distribute any estate funds." (OSB: guidance for completing Form 31, Proof of Claim, page date 2024-07-25).
• Old debts: "A statute-barred debt is not a provable claim under the Act." (OSB). Limitation periods depend on the province; we didn't check them.
• Employees only: "If you are an employee legally entitled to work in Canada, you have certain protections under the Wage Earner Protection Program (WEPP)". That program is written for employees. If you're an independent contractor, it isn't for you; see employee or contractor if you're not sure which you are.

Billing a Canadian client in US dollars, pounds or euros? The form asks for Canadian dollars, converted as above. Our guide to invoicing international clients covers currencies more generally.

7. What you might get back

• UK: "The trustee or liquidator will distribute any proceeds from sold assets to unsecured creditors in this order of priority:"
  • fees and charges of the bankruptcy or liquidation
  • debts to preferential creditors, such as wages owed and contributions to occupational pension schemes
  • for a company, any creditor holding a floating charge over an asset
  • all unsecured creditors
  • any interest payable on debts
  • for a company, the shareholders
  "If full repayment of claims is not possible, creditors instead get a dividend in proportion to the value of each claim." "If there are few assets, you may receive nothing." (Insolvency Service). "If the person or company in formal insolvency does not have many or any assets, you will not get your money back." "It often takes a long time to deal with assets, in some cases, a number of years. So you might not hear back from us, or the appointed insolvency practitioner, for some time after we’ve sent you the report to creditors." (Insolvency Service).
• UK, if a dividend is paid: "If a dividend is to be paid, the OR/IP will contact creditors. If you haven’t submitted a proof of debt form, this is your last chance to do so. Otherwise you may lose your right to share in any money after the dividend has been declared." "When paying a dividend, the OR/IP can reject the whole or part of a creditor’s claim." "The OR/IP must provide a reason for rejecting a claim in writing." "If you are not happy with the decision on your claim, you may apply to the court for the decision to be reversed or varied. You should seek legal advice if you wish to do this." (Insolvency Service).
• US: see the liquidation lines in section five: in a case with no assets there is no payout to unsecured creditors.
• Canada: "The claims of ordinary creditors, i.e., those who are not secured creditors and don't have priority under section 136 of the BIA, are satisfied on a pro rata basis: after all secured and preferred creditors have been paid in full, ordinary creditors divide the remaining funds among themselves in proportion to how much each is owed." "The OSB maintains a database of unclaimed dividends, which is a listing of creditors who are owed dividends but who could not be located by the LIT." (Office of the Superintendent of Bankruptcy).

Our reading: an unpaid freelancer is usually an ordinary unsecured creditor, so plan as if you'll get nothing, and treat anything paid as a bonus. If your contract gave you security over something, that's different; get advice.

8. Payments just before the case

• Canada: "A transfer of property (preference) can be set aside if, in the three months prior to the date of the initial bankruptcy event, the debtor made a payment to one creditor that favored the creditor over others." (Office of the Superintendent of Bankruptcy). That's why the claim form asks for the payments you received.
• UK and US: both systems have their own rules on payments made shortly before a case; we didn't read them for this page.

If a trustee or liquidator asks you to pay money back, don't ignore it and don't pay it on the spot: get legal advice.

9. Side by side

Our summary of sections two to six, not official wording.

10. What to put in your claim

Our checklist, based on what the official forms and pages above ask for:

Invoices that show the client's name, what you did and the dates make this much easier; see what a freelance invoice should include.

11. Step by step

Our suggested order (general practice, not an official list):

For the tax side, see bad debts in the dispute guide (IRS, HMRC and CRA).

12. Wording to copy

Replace everything in [brackets]. This is ours, not from any government page, and it's not legal advice. If you've been sent an official form, use that form; this email is for telling the right person you're owed money, or for sending the form with a covering note.

Email to whoever is handling the case

Subject: [Client's legal name], [case or reference number]: claim from [your name or business name]

Dear [name of the official receiver, trustee, liquidator or Licensed Insolvency Trustee],

I understand you are dealing with the [bankruptcy / liquidation / administration / proposal] of [client's legal name]. I am an unsecured creditor: I provided [service] under [our contract / my accepted quote] dated [date], and the invoices listed below are unpaid.

Amount owed on [the date the case started]: [amount and currency].

I attach a statement of account and copies of the invoices, the contract or quote, and our emails about payment. Please add me to the list of creditors and send me any form you need me to complete, and any reports to creditors.

My contact details for this case: [postal address], [email], [phone].

Kind regards,
[Your name]

A statement of account to attach

Statement of account: [your name or business name]
Debtor: [client's legal name], [case or reference number]
Date the case started: [date]

Invoice [number] | issued [date] | [what it was for] | [amount] | paid [amount, or none] | still owed [amount]
Invoice [number] | issued [date] | [what it was for] | [amount] | paid [amount, or none] | still owed [amount]

Total still owed on [the date the case started]: [amount and currency]
Payments received from the debtor before that date: [dates and amounts, or none]
Attached: [contract or accepted quote], [invoices], [emails]

13. Checklist

• Checked the official register or records for the client's exact legal name.
• Found who is handling the case and their reference number.
• Stopped reminders, late fees and any court action against the client.
• Claim sent in the way and by the date the notice or official page says.
• Statement of account, invoices and contract or quote attached as copies, with personal numbers hidden where the form says.
• Payments received shortly before the case listed, if the form asks.
• Contact details you'll keep for years given to the case.
• Tax side looked at: bad debt rules for the unpaid amount.
• Next time: deposits, shorter payment terms or staged payments for big jobs (see payment terms and contract clauses).

Free tools and kits

• Our free invoice generator runs in your browser; nothing you type is sent or saved.
• Our paid Freelance Billing Kit by Small Rows (US$12, one-time) has an Invoices tab that lists every invoice you've sent, with what's been paid and what's still owed, and a Dashboard that shows what's still owed by client. That's the list of unpaid invoices a claim asks you to back up. It doesn't file claims, follow an insolvency case or tell you what you might get back.
• All three kits together: the All-Kits Bundle by Small Rows (US$24, one-time).

Where the sources differ

• Words: the UK pages talk about a "proof of debt" and an official receiver, trustee or liquidator; the US and Canadian pages talk about a "proof of claim" and a trustee (in Canada, a Licensed Insolvency Trustee). The ideas line up, but use the words on the notice you get.
• Do you need to file? The UK page gives an amount below which you only need to give your details and the amount; the US pages say a claim may not be needed in a case with no assets, or in a reorganization where the debtor listed your claim correctly; the Canadian page says you must file to share in any payout.
• Page dates: two of the GOV.UK pages show old page dates, and the US Courts pages show none; that may only mean the text hasn't changed. Check the live page before relying on it.
• What we did not check: Scotland and Northern Ireland; UK administration, voluntary liquidation, company voluntary arrangements and individual voluntary arrangements beyond the lines quoted; US state law, assignments for the benefit of creditors and how to search US court records; Canadian proposals, receiverships, the Companies' Creditors Arrangement Act and provincial law (including Quebec); rules on payments made shortly before a case in the UK and US; whether you can stop work or end a contract when a client becomes insolvent; work done after a case starts; the EU and other countries.

When to get advice

• you're owed a large amount, or the client is your main client;
• you started a court claim before the case began;
• a trustee or liquidator asks you to pay money back;
• your claim is rejected or disallowed;
• you're asked to keep working for a client in an insolvency process;
• the client is in another country, or the notice is from a court you don't know.

Talk to a lawyer or an insolvency practitioner (in Canada, a Licensed Insolvency Trustee) where the case is, or contact the Insolvency Service, the bankruptcy court or the Office of the Superintendent of Bankruptcy for information about the process. This page is general information only.

Related

• How to chase an unpaid freelance invoice
• Client disputes your invoice or pays only part
• Invoice payment terms explained
• Freelance deposits and retainers
• Freelance contract checklist
• Late payment rules in Canada

Sources

• United Kingdom: GOV.UK: register as a creditor in a bankruptcy or liquidation (page date 2015-09-21) · Insolvency Service: if an insolvent company or bankrupt person owes you money (page date 2025-01-09) · Insolvency Service: claim money back, detailed guidance for creditors (page date 2025-01-09) · GOV.UK: search the bankruptcy and insolvency register (page date 2015-03-19)
• United States: US Courts: Chapter 7 - Bankruptcy Basics · US Courts: Chapter 11 - Bankruptcy Basics · US Courts: Process - Bankruptcy Basics · US Courts: Official Form 410, Proof Of Claim · US Courts: Instructions for Proof of Claim (PDF) (no page dates shown)
• Canada: Office of the Superintendent of Bankruptcy: you are owed money, bankruptcy (page date 2015-11-30) · OSB: guidance for completing Form 31, Proof of Claim (page date 2024-07-25)

Checked 2026-10-16. Found a mistake? Tell us via Support.