Posted by Margie Pratl on 11/13/08 12:35pm
Msg #269599

Archer Land Title

For those of you that are owed for closings I received a Bankruptcy notice. Has anyone called the atty handling the bankruptcy or are we supposed to do anything? Please let me know as I would appreciate it.

Reply by SharonH/OH on 11/13/08 12:46pm
Msg #269600

Assuming you received the same notice I did, read halfway down the first page, to where it says you do not need to file a proof of claim until they tell you otherwise. There's a more descriptive paragraph on the reverse side of the notice. Supposedly the court will notify us if and when any proof of claim is necessary. The notice says there are no assets to pay creditors, so I'm assuming I will receive nothing, and I'm just writing mine off. JMHO. Not to be construed as legal advice.

Reply by sjp on 11/13/08 12:54pm
Msg #269601

I didn't receive a bankruptcy notice yet, however, they did just bounce a check I rec'd from them. I was listed on the HUD.

Reply by dickb/wi on 11/13/08 1:02pm
Msg #269604

I will receive nothing, and I'm just writing mine off. JMHO. Not to be construed as legal advice.


i hope you don't mean by writing off that you will show it as a deduction on your taxes.

because you don't report it as income you can't write it off. you can [and i assume will] deduct the expenses involved .


"i am not a cpa or attorney and am not giving legal or qualified tax advice. you should seek professional advice as to your tax and legal questions".

Reply by SharonH/OH on 11/13/08 5:39pm
Msg #269656

Thanks for the clarification. I work for H&R Block during tax season, so am aware of the distinction. I didn't mean to imply writing off for tax purposes - just taking it out of my receivables so it doesn't aggravate me to see it every day!

Reply by Marian_in_CA on 11/13/08 1:31pm
Msg #269607

Something to remember about Bankruptcy...

If you've received a notice from the court about the bankruptcy, you are already listed as a creditor and that court is well aware the company owes you money. That also means that you are NOT ALLOWED to try to collect the money from them. Bankruptcy filing puts an automatic stay on collection and if you try to collect the money knowing they're in bankruptcy, you could be held in violation of bankruptcy protections laws.

It's not fair at times, I know... but I just wanted to remind you guys not to keep trying to collect on unpaid invoices right now. The only thing you can do is make sure the court lists you as a creditor in case there are assets that are found to pay off some of the debt. And what is really important to remember that if the debt is discharged in the bankruptcy, you also cannot legally collect on the invoice -- ever. The debt doesn't actually go away, it just is not collectible.

As for writing off the debt... that depends on a lot of things, but especially the answer lies in whether you use a cash or accrual basis for accounting. The process is different for each basis and you need to follow the GAAP. Most people will want to talk with an accountant about the proper way to write-off bad debt because the exact way for doing it depends on a variety of factors unique to each individual business.

No, I'm not a laywer... blah, blah, blah.... this is all general, basic knowledge of the processes. involved. My suggestion is that if you want to write-off the debt you go see an accountant because it's not always as easy as just removing it from your ledger.

Reply by taxpro on 11/13/08 2:31pm
Msg #269610

Re: Something to remember about Bankruptcy...

"....If you've received a notice from the court about the bankruptcy, you are already listed as a creditor and that court is well aware the company owes you money."...

I think the bankruptcy court must have sent this notice to all of Archer's vendors, whether or not they owe them any money. I got one, and Archer doesn't owe me anything (thankfully). The last job I did for them was in May, I got paid in June, and the check cleared.

Regarding writing off the debt, you're right. If you report your income on the cash basis of accounting, you cannot write off business bad debt. Accrual basis taxpayers can deduct bad debt because they have already reported it as income. Reporting the bad debt offsets that income, so you don't pay tax on money you never received. If you didn't report it in the first place, there is no basis for a bad debt deduction. Naturally, you can deduct the expenses involved.

Reply by MistarellaFL on 11/13/08 3:11pm
Msg #269619

OT*** Happy Birthday Julie n/m