What happens when someone who owes my business money files bankruptcy?

When a customer files bankruptcy, there may be certain actions that need to be taken quickly, including stopping the shipment of goods in transit or recovering delivered goods sold on credit.  There are also deadlines for filing with the Bankruptcy Court proof that the debtor owes your business money.  When you learn that a customer who owes your business money has filed for bankruptcy protection, you should immediately stop any collection efforts.  This does not mean that you automatically lose your right to payment, but you will need to work with an attorney to ensure that any rights to payment out of the bankruptcy process are protected.  If you have questions regarding bankruptcy, you should contact Richard J. O’Brien.