Bankruptcy - what to do when a client files for it.

[Jon Morris]

Hi everyone.

I have a pretty major acount thats about to go bankrupt. Are there any
preemptive steps that I should take to maximize what (if anything) I'll get
out of the settlement?

I kept extending credit to these guys because they were a growing company
and I became friendly with them. Luckily for me its all consulting services
and no product.

Thanks so much.

Jonathan

[John A. Weeks III]

Post by Jon Morris
I have a pretty major acount thats about to go bankrupt. Are there any
preemptive steps that I should take to maximize what (if anything) I'll get
out of the settlement?
I kept extending credit to these guys because they were a growing company
and I became friendly with them. Luckily for me its all consulting services
and no product.

Make copies of all your unpaid invoices, build a fire, and have a
hot dog roast. At least you will get one good meal out of the deal.

Given that you are an unsecured creditor, you are about a mile back
in line for any money. If they had any money, they wouldn't be
bankrupt. The employees, secured creditors, and bankers will have
all the money, and unsecured creditors will see nothing.

-john-

[SD]

Post by Jon Morris
Hi everyone.
I have a pretty major acount thats about to go bankrupt. Are there any
preemptive steps that I should take to maximize what (if anything) I'll get
out of the settlement?
I kept extending credit to these guys because they were a growing company
and I became friendly with them. Luckily for me its all consulting services
and no product.
Thanks so much.
Jonathan

This why we have AR departments with CFO's. Catch the smoldering before
it turns into a fire. If you kept increasing the credit limit, you
should have become a secured creditor. Now you are SOOL.

Dan

[Jon]

Post by Jon Morris
I have a pretty major acount thats about to go bankrupt. Are there any
preemptive steps that I should take to maximize what (if anything) I'll get
out of the settlement?

One big question - is the company going bankrupt a corporation or not?
At least you are out only your time. Stick with giving credit only to
the extent of what you can afford to lose.

[NC]

Post by Jon Morris
I have a pretty major acount thats about to go bankrupt.
Are there any preemptive steps that I should take to
maximize what (if anything) I'll get out of the settlement?

Talk to an attorney. He/she will explain your options to you.

Cheers,
NC

[Jon Morris]

thanks guys...

I agree with the comment of not being able to extend what you can't afford
to loose. I took the aproach of continuing to do monthly business for the
client when I had an open schedule to show that (incase they pulled through
bad times) that they do need monthly service....after $10,000, I figured it
was time to pull the plug.

I spoke with my acountant and he wrote up a "promisary note" which, belive
it or not, I had signed by the president and chairman of the corporation.
That might help me a little, but if not, hopefully I'll be albe to roast
those hot dogs!

A good lesson I suppose...

Thanks to all who replied.

Jonathan

Post by NC

Post by Jon Morris
I have a pretty major acount thats about to go bankrupt.
Are there any preemptive steps that I should take to
maximize what (if anything) I'll get out of the settlement?

Talk to an attorney. He/she will explain your options to you.
Cheers,
NC