Reply by Marian_in_CA on 11/1/08 11:38pm
Msg #268853
It's a bankruptcy... all you can do is make sure to file a claim as instructed. You received the notice because you are listed as a creditor in the bankruptcy. You might see money... you might not. Now that you've received notice of their filing you are NOT allowed to try to collect money from them. When a bankruptcy is filed, there is an automatic stay in place, and you are federally obligated to honor it. That means you can't try to collect the money through collections or even court channels without violating federal law.
Yes, it is frustrating, but that's what bankruptcy is for. The company has officially petitioned the government for help, asn as such all of their creditors have to back off and let the court settle it. That is your recourse. Depending on the way the bankruptcy is handled, you may get paid in full, in part or not at all. It's up to the judge and the trustee. If the judge discharges the debts, then you will not be able to legally collect the unpaid debt -- ever. The best you will be able to do is to write is off as bad debt in your business accounts.
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