If a loan company files for bankruptcy, can another company collect on its account?

Asked on September 17, 2014 under Bankruptcy Law, Wisconsin

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Yes--in fact, the company filing for bankruptcy can itself still collect on any accounts which it had, since bankruptcy affects debts owed *by* a company (or person), not debts owed to it; filing for bankruptcy has no effect on the ability to collect amounts owed to a person or company. Or if the debt was sold or assigned to another person or company, the assignee (the one who acquired the debt) could collect on it.


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