If my wife opened a new business and cut a check to a contractor who never deposited them and then declared bankruptcy, can the owner of the company now cash them?

She actually wrote 2 checks which were cut to the general contractor, who never deposited them and has now declared bankruptcy. Can the owner of the company still deposit the checks or cash them if her business was part of the bankruptcy.

Asked on February 11, 2015 under Bankruptcy Law, Washington


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Yes, a bankruptcy only affects debts owed BY the person or company filing bankruptcy--it does not effect amounts owed TO that person or company, and does not void checks given to that person or company. So the owner of the company should be able to cash the checks, notwithstanding the bankruptcy.

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