It is estimated that over 200,000 bankruptcy cases are filed every year. If you have been alerted that your customer has filed bankruptcy, there are certain things you ought to do. You should note that one filing for bankruptcy does not mean that you cannot get the amount of money the customer owes you. In this case, you should follow a certain protocol.
Do not contact the customer
Bankruptcy sets certain rules for communication between a creditor and a debtor. From the moment you get a bankruptcy notice, you are not supposed to contact the debtor or even ask for a payment. This is known as automatic stay. Usually, a trustee is assigned the account, and he or she is in charge of the debtor’s debts and assets.As much as the notice will give you the contact information of the trustee, you will not be provided with detailed information concerning the bankruptcy. Remember that the trustee’s office cannot offer you legal assistance.
Hire a bankruptcy attorney
You should note that bankruptcy attorneys not only work for debtors, they can also assist debtors. Remember that bankruptcy law is quite complicated. If a lot of amount of money is involved, it is a good idea to hire an attorney who specializes in bankruptcy law.
Another important part of bankruptcy law is preference clause that means debtors cannot prefer one creditor over another. This means that a trustee must go to every creditor who the debtor paid in the last three months preceding bankruptcy filing. However, if a creditor is a business partner, insider identity, or family member, then a trustee is required to check back an entire year. In such a case, a defense attorney can be of great help to you.
File proof of claim
Usually, the bankruptcy filing notice you get includes information on the manner in which a debtor owes you. Why are you owed a given amount of money? It is a good idea to file the proof of claim. Failure to file, you are bound to forfeit your rights of being paid. This process is quite straightforward, and a lawyer can help you.
Attend creditors meeting
Usually, creditors will be invited to a meeting also known as 341 hearing. At this point, the debtor is required to explain how his or her business got into bankruptcy. This is your opportunity to ask questions.