Collecting from debtors can be challenging enough without adding the complication of dealing with a bankrupt debtor on top. When it comes to learning how to collect from bankrupt debtors, there are various things to keep in mind to avoid future issues for your business. Click here for more information about our debt recovery agency and how we can help you to recover commercial debt for your business.
How to Collect from Bankrupt Debtors
A common question we receive from business owners is whether it’s even possible to collect from bankrupt debtors. When a company states that they are filing for bankruptcy, you’ll often find that you are sent a piece of paperwork which allows you to try and work to get your payment. Remember, not every situation is the same. This is something we encourage business owners to keep in mind at all times, as there may be different ways to settle any outstanding debt. It’s not always up to the company itself to decide who they will pay first, and instead, the team dealing with the bankruptcy may be the ones to decide if you are paid or not.
There are different types of bankruptcy to learn about, and these can vary depending on where the company you are dealing with is operating from. The type of bankruptcy that a company puts in for will impact what type of payment you receive and how simple this process is. Our team will be able to advise you about how to claim debt bankruptcy and if you need to go through the court claims debt bankruptcy process. We know that this can be a challenging and drawn-out task, but we’ll be able to suggest the best action to help increase the chances of you being paid back in the future.
What Order Are Companies Forced to Pay Debt In?
The order in which companies are paid will depend on the amount of debt they have at the time of bankruptcy. There are often preferred companies or creditors which will get the top billing when it comes to paying off debt. These usually include the company’s employees and any type of local or state tax that may be overruled. Secured debts come next, which include mortgage providers and other types of lenders. Finally, unsecured debts are those which are for products and services. This type of business comes with a higher risk, and this is the area we see the most issues with.
When it comes to trying to claim the debt from bankrupt debtors, you’ll need to go through the proper process of making proof of your claim. Make sure you do everything in writing throughout the process, or you may find you don’t have the paperwork and information to back yourself up. The more proof you have of the payment you are owed, the more likely our team will be able to help you in securing your payment. The amount you are owed will have a huge impact on the length of time this process will take, and some companies decide that smaller payments simply aren’t worth the time and effort. We can look through your books to figure out what the best way forward is and help you to take the required action.
Protecting Yourself in the Future
As a debt recovery agency, we don’t just focus on dealing with current concerns surrounding commercial debt. We also work with businesses to help them avoid using debt collection services in the future. Our team can help you to audit your current business accounts and practices so that we can find areas where you can minimise risk to reduce the fight that’s needed to receive payments in the future. We’ll be happy to help share our top tips for dealing with chasing debt. We know this is an incredibly unpleasant task for any type of business owner, and the sooner you put good procedures in place to receive payments on time and ensure you have no issues, the easier it will be to run a profitable business.
The past two years have been incredibly challenging for businesses, and we have seen a huge increase in the number of bankrupt debtors that companies are dealing with. If you are facing this issue at the current time, know that you aren’t alone with this problem. Our team will be here to support you in any way that we can, ensuring that you get paid for the goods or services that you’ve worked so hard to provide. No matter how big or small the debt you are owed is, we’ll be here to help you recover lost funds.
Contact us today on 0330 229 1991 or email us at firstname.lastname@example.org for queries and more information about bankrupt debtors or to discover how we can support your business in the future to receive payments on time.