If you provide products or services to other businesses, you rely on their success to further your own. When one of your clients declares bankruptcy, it’s natural to worry about how that is going to affect you. A bankruptcy attorney from The Gil Law Firm in Dothan, AL, can answer any questions you have about recovering funds from a business that has declared bankruptcy.
One of My Clients Declared Bankruptcy; What Do I Need to Know?
Is My Claim a Priority?
There is a hierarchy of claims in bankruptcy cases, which means some creditor claims against the debtor are more important than others. The various kinds of claims include administrative claims, secured claims, priority claims, unsecured claims, and equity interests. Whether or not you receive your money will depend on the type of claim that you have against the debtor and how many additional claims other creditors have, as well.
Will I Be Paid If My Claim Arose After the Business Declared Bankruptcy?
In Chapter 11 bankruptcy, claims that arose after a company declared bankruptcy get administrative expense status, which means they take priority over other types of claims.
Will I Receive More Money If the Business Declared Chapter 7 or Chapter 11 Bankruptcy?
In general, Chapter 7 bankruptcy results in a liquidation of assets, and the assets typically sell for much less than their actual worth. Creditors can expect to get more money from businesses that declare Chapter 11 bankruptcy, which is usually a reorganization of the company and its liabilities.
How Can I Ensure I Get Paid?
Depending on the type of claim you have against the debtor, there are various strategies you can employ to improve your chances of getting the money that is rightfully yours. A bankruptcy attorney can help you explore the best way to proceed.
If a business that recently declared bankruptcy owes you money, turn to The Gil Law Firm in Dothan, AL. Visit their website to learn more about their experience in debt consolidation, and call (334) 673-0100 to schedule an initial consultation with a bankruptcy attorney today.