Entrepreneurship & Small Business

Corporate Customer went bankrupt - Unpaid invoice of $2000

  • Last Updated:
  • Jun 19th, 2019 1:35 pm
[OP]
Deal Addict
User avatar
Jun 12, 2003
2881 posts
73 upvotes
Markham

Corporate Customer went bankrupt - Unpaid invoice of $2000

Hi guys

We got a corporate customer who went bankrupt before they can pay our bill. The legal firm that handled their bankruptcy send me an email saying after all the assets have been liquidated, they can pay me $0.2 on the dollar. They sent me a form asking for release from all actions, suits, debts, etc.

Should I just sign and collect my 20% on the dollar? I'm assuming there's no point in going to court to claim the remaining amount considering the corporation has been bankrupt and has actually no money left in their bank account. Correct me if I'm wrong please. I'm not looking to make things complicated, just want to make sure I've applied reasonable effort to collect payment. We did services for them almost 1.5 years ago.
7 replies
Deal Expert
User avatar
Aug 2, 2010
15193 posts
4927 upvotes
Here 'n There
Take the $ 'n run unless you want to pursue some malfeasance with respect to the bankruptcy which would be pointless for the $1,600 balance.
Newbie
Jun 8, 2019
73 posts
15 upvotes
GTA
chinaboy1021 wrote: Hi guys

We got a corporate customer who went bankrupt before they can pay our bill. The legal firm that handled their bankruptcy send me an email saying after all the assets have been liquidated, they can pay me $0.2 on the dollar. They sent me a form asking for release from all actions, suits, debts, etc.

Should I just sign and collect my 20% on the dollar? I'm assuming there's no point in going to court to claim the remaining amount considering the corporation has been bankrupt and has actually no money left in their bank account. Correct me if I'm wrong please. I'm not looking to make things complicated, just want to make sure I've applied reasonable effort to collect payment. We did services for them almost 1.5 years ago.
Take whatever you can get and in the future be wise to choose who you do business with.
Deal Expert
User avatar
Aug 2, 2010
15193 posts
4927 upvotes
Here 'n There
slickone19 wrote: Take whatever you can get and in the future be wise to choose who you do business with.
Be wise, lol. If you could predict which customers will stiff you you would have no bad debt. It don't happen.
Deal Addict
Apr 13, 2005
1214 posts
1223 upvotes
Markham, ON
Take the money and write off the loss. You’ll probably spend more than $1600 in expenses trying to collect.
FIDO, Freedom Mobile, Koodo, Public Mobile, TELUS customer.
Deal Fanatic
Sep 23, 2007
5061 posts
1155 upvotes
It happens. Take what you can and move on. Taking legal action for $2000 bill is not worth it. Chasing someone who has no assets is not a wise decision.
Deal Addict
Feb 25, 2007
1292 posts
755 upvotes
Ottawa
As others have said, take the money and move on.

Three operative words here are "the legal firm that handled their bankruptcy" (not them trying to avoid bankruptcy), "services" (not tangible goods), and "1.5 years ago".
The things to ideally watch for in a situation like this are i) assets you can recuperate as yours, not theirs, for instance (and only in certain cases) goods you provided but were not paid for, ii) other reasons you would have a priority claim vs other creditors, such claim documented in a timely fashion, iii) reasons you would believe the bankruptcy trustees and their ilk are not fairly dealing with all creditors.

You were a provider of services, not goods, a long time ago, for a $ sum small enough it's not worth spending more of your time and money carefully investigating. Be happy you're getting 20c on the dollar and not 0c. Consider whether it is worth explicitly considering credit risk in bidding or contracting with your other clients, or if this was a **** happens one-off, and move on.
Deal Addict
Jun 24, 2015
4536 posts
1336 upvotes
Woodbridge, ON
if they bought equiptment from you and can not pay the bill, simply ask them to return the equiptment back and you will waive the invoice, minus administration fees, then simply sell the crap to someone else.
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