How can a business protect itself from someone declaring bankruptcy with a past due amount?
Question Details: I am an "S" corporation, someone owes this company $1,000. We received a letter of intent to file bankruptcy in US Court. I want the $1,000 (principal matter). If I sent a letter to them stating this company will suspend collection efforts for 2 years.....would that take my company off of the bankruptcy list and allow me to still collect through small claims at a later date?
No, unfortunately the bankruptcy applies to all debts incurred before the date of bankruptcy; if it was that easy to circumvent the bankruptcy process, everyone would do it. You are probably best off getting listed with the bankruptcy court as a creditor, which will at least (hopefully) let you collect something on the dollar eventually, when it's all settled. There really isn't anyway to protect a business from a customer, client, etc. going bankrupt, other than getting deposits or payment up front.
