For many businesses, offering credit or goods and services on payment terms is a necessary part of doing business — but it also introduces risk.

If you’re owed money by a business that’s gone into liquidation, voluntary administration, or restructuring (and you don’t hold security over any of its assets), you’re considered an unsecured creditor. This is a common but often challenging position to be in.

Unpaid debts can put serious financial strain on businesses, particularly small and medium enterprises.