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Collecting a debt purchased from an out of state customer who filed for bankruptcy and opened new company.

Anaheim, CA |

I am a business owner from Anaheim, Ca. who sold merchandise to a customer in Schaumburg, IL from two orders he placed on-line. At time of shipment of two orders, the customer was still in business. The customer has now filed for bankruptcy and re-opened same company under a different name. His claim is that we have no signed documentation other than that of the email trail requesting product. I have tracking information for both transactions, serial numbers and proof of receipt by an employee who worked for the original company prior to bankruptcy, including the third party company who has them in their possession and is currently using them. Please advise.

Attorney Answers 4

  1. Sounds like you have a creditor's claim in bankruptcy of the company as well as a claim against the new company. Not clear if an individual is involved. You should seek representation of bankruptcy/litigation attorney to protect your interest in the bankruptcy as well as other claims you have. Best of luck

    In addition to AVVO's disclaimer, please note that by this answer no attorney client relationship is intended mor entered into and unless there is a signed retainer agreement in place, neither me nor anyone in our office has intended to solicit clients nor reprints them. The answers are general in nature and without weighing specifics of particular query. No answer should be relied on in whole or in part, directly or otherwise to act or not to act in pursue of any of your potential claims in law or equity. You should consult with and obtain advise or representation of an attorney to protect your rights regarding your case or matter.

  2. Was your customer a business or an individual dba a business. A business cannot obtain a discharge of its debts in bankruptcy whereas a individual can. File a claim in the bankruptcy but be aware that most of the time you will get paid nothing. If the amount involved was substantial, you may have a claim under 11 USC 523 that the debt is ineligible to be discharged. If so, you will need an attorney in the community where the bankruptcy was filed to prepare an adversary action against the customer. Act quickly because there are short deadlines in bankruptcy court and they are strictly enforced. Hope this perspective helps!

  3. You can add a claim in the Bankruptcy proceedings, but there are likely other claimants who might have priority over you. In the end you may end up with nothing.

    I wish you the best.

    Your particular situation may be different. This answer is intended for information purposes only. No Attorney-Client relationship has been established.

  4. There are a few possible avenues of recourse.
    You may be able to go after the personal assets of the owner if you can show that the company is just an alter ego to protect the owner from creditors. Next, you have a claim in bankruptcy court but will likely get pennies on the dollar. Finally, you may be able tog o after the successor business. But all these strategies will require the an attorney experienced in civil litigation.

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