Payday lender Wonga deposited in the administration yesterday after it had confirmed that it had stopped applying for new loans.
The controversial lender said that after assessing all options the board had "decided that it was appropriate to keep the company in administration".
Grant Thornton has been appointed as a manager for the company and advises those with outstanding loans to continue with repayments.
Thousands of former borrowers have outstanding claims for damages for mis-sold loans
The lender's collapse has put 500 jobs at risk and there are now questions about how 220,000 current customers and the thousands of previous customers claiming compensation from the company are handled.
There is a statement on the Wonga site that states: "Wonga customers can continue to use Wonga services to manage their existing loans, but the UK companies do not accept new loan applications. & # 39;
Earlier this week, the company had emergency discussions with the Financial Conduct Authority about the impact of the collapse on existing customers. A few weeks ago, it raised £ 10 million from shareholders to try to keep their heads above water after a significant increase in customer complaints from the past.
In 2014, it paid for £ 220 million debt to 330,000 customers after granting loans to people who could not afford to pay them back. In the same year, the FCA said it would increase the affordability of the checks to the industry and introduce a ceiling for the cost of flash credits on the loan amount per day.
Here we look exactly what has happened and how both current and past customers will be affected.
What should I do if I have an outstanding loan with Wonga?
If you leave a loan with Wonga, you must continue to repay as planned. If you miss a payment, you may be hit with costs and additional costs and this may affect your creditworthiness.
Wonga or administrator Grant Thornton would contact you within a few weeks to explain what is going on.
How do I access information about my current loan?
You can still use the Wonga website that remains available around the clock and the company says it will maintain the same functionality levels.
I demand compensation from Wonga, what happens to this money?
If you claim compensation but have not yet received the money, you will be added to a list of creditors.
Grant Thornton will look at the assets left behind in Wonga and then go through this list and try to arrange as many outstanding payments as possible, but there is no guarantee that you will receive a settlement that was granted to you.
Wonga says that customers with existing loans must continue to pay as planned
What happens if I have a new compensation complaint about Wonga?
You can no longer file a claim if you think you have sold a Wonga loan incorrectly.
The Financial Ombudsman Service has confirmed this and you can not appeal to the Financial Services Compensation Scheme because loans do not fall under the FSCS scheme.
Can I still get a loan from Wonga?
No, the company has stopped new loans and does not accept new loan applications.
What can I do if I have trouble paying off my existing loan?
You still have to make repayments if you have an outstanding loan, even if Wonga is under management. If you find it difficult to do this, your best option is to contact a free charity for debt advice, as they can talk through your options and work out a suitable repayment plan.
There are a number of companies that offer this service, including Step Change, Citizens Advice and Money Advice Service – they offer free, confidential advice, either by telephone or in person.
What other options are there to borrow money?
There are a number of ways to borrow money, but how you are able will depend on your current credit rating.
Those with high ratings are more likely to be approved for leading loans and cheap credit cards because they are seen by lenders to be more inclined to make timely repayments. Those with a bad credit score will have fewer options because lenders will see that they are less inclined to repay the loan.
High-yield short-term credits such as payday loans are usually the most expensive way to borrow money. Instead of going to one of these lenders, there are other options, such as borrowing from friends and family, shortening your expenses or speaking with another type of lender.
A credit union, for example, offers loans to people with low credit scores and will not charge the same levels of interest as payday lenders.
There are also a number of honest finance providers who charge less than a lender and the repayments are based on an affordability assessment that allows the borrower to keep track of the repayments.
For full details and options, see our guide on clearing your debt.
Wrestling with debt?
If you are struggling to clear existing debts, it can be tempting to bury you in the sand, but there is free help and advice beyond what can help.
This is Money has put together a 10 step plan to help you get out of debt, which you can read here in full.
You can also get free help from charities and consulting websites with guides and information sheets or let you speak to a consultant who can help you explain your options.