London's High Court rejected the plan, which would have cut compensation payouts to customers for mis-selling loans, sending the company's shares plunging more than 50%.
In a statement, Amigo said it would not appeal the ruling. It anticipates delaying its financial results for the year ended March, it added.
"Without a scheme, Amigo faces insolvency as it will be unable to satisfy its customer compensation claims as well as meeting the legally binding funding obligations owed to its secured creditors," said CEO Gary Jennison.
Subprime lenders in Britain have been hit by a regulatory clampdown in recent years that has led to a wave of claims, and in some cases compensation payouts, for mis-selling loans. The effect of the COVID-19 pandemic has added to the strain.
Amigo - which has 137,000 current customers and has lent to 500,000 people since 2005 - had applied to the High Court for permission to cap payouts, saying a surge in claims threatened it with collapse.
(Reporting by Tom Wilson; Editing by Rachel Armstrong)