- Home
- Bankruptcy and Bankruptcy Code
- Business Entities
- Departmental Operations
- Credit Practices
- Collection Practices
- Financial Analysis
- Financing Methods
- International Credit
- Laws and Regulations
- Payment Methods
- Performance Measures
- Security Instruments
- Career Management, and Job Change
- Credit Website Tools
- Upcoming Educational Events
- Credit and Collections Tools and Tips
- Ten Tips on Deduction Management
- Ten Tips on Customer Financial Statement Analysis
- Ten Tips on Limiting Bad Debt Losses
- Ten Tips Relating to Chapter 7 Bankruptcies
- Ten Tips on Communicating with Your Manager
- Ten Tips on Handling Angry Customers
- Ten Tips on Increasing your Visibility at Work
- Ten Tips on Prioritizing Work in the Credit Department
- Measuring Job Performance - Ten Tips
- Ten Tips on Customer Financial Statement Analysis
- Ten Creative Collection Tips
- Ten Creative Problem Solving Tips
- Tips on Extending Credit to Newly Formed Companies
- Ten Collection Do's and Don'ts
- Tips on Choosing a Third Party Collection Agency
- Ten Ways to Find Customer Financial Statements Online
- Ten Tips Relating to the Use of a Personal Guaranty
- Asserting the Ordinary Course of Business Defense to a Bankruptcy Preference Demand; Ten Tips
- Ten Tips on Filing a Proof of Claim
- Ten Tips on Professional Accreditation through NACM
- Ten Things Not to Say to a Customer
- Ten Tips About the Discharge of Debts in a Chapter 7 Liquidation Bankruptcy
- Ten Tips on Hiring and Training New Collectors
- Ten Tips on Building a Better Credit Application
- Ten Tips on Managing Change in Credit
- Ten Tips on Automating the Cash Application Process
- Making Effective Proposals
- Justifying the Cost of Collection Management Software
- Tips on Reducing Credit Risk
- Tips for Handling Unearned Discounts
- Ten Tips about Online Credit Training Programs
- Ten Tips on More Effectively Interacting with Customers
- Comments about Risk Management
- Ten Comments on the Roles and Responsibilities of the Credit Department
- The Roles and Goals of External Auditors
- Ten Key Performance Metrics for the Credit and Collection Department
- Tips on Stress Management in the Credit Department
- Ten Benefits of Online Training
- Ten Tips on Networking Online with other Credit Professionals
- Ten Tips When a Customer Closes its Doors
- Ten Ways Credit Managers get Fired
- Ten Key Financial Ratios
- Tips for Handling Difficult Discussions with Credit Team Members
- Ten Things Not to Say to Debtors
- Ten Tips on Attending Meetings
- Ten Tips on Effective Meeting Follow up and Documentation
- Ten More Meeting Tips
- Ten Tips on International Interactions with Customers
- Effective Teams, Ten Tips
- Tips on Creating Better Emails
- Generating Effective Credit Correspondence
- Exporting
- Accounting
Ten Tips Relating to Chapter 7 Bankruptcies
A Chapter 7 bankruptcy is a legal procedure under the U.S. Bankruptcy Code for liquidating a business that cannot pay its debts.
- File your Proof of Claim form promptly
- File the Proof of Claim for the net amount due. Reduce outstanding invoices and chargebacks with credits and on account cash to determine the net amount owed by the bankrupt debtor
- Be sure to sign this document as required, and include with it copies of all relevant documents including copies of an account statement along with open invoices, debits and credits as required
- Work with your attorney to review your options if you receive a Preferential Transfer demand
- Ask your attorney about Reclamation Rights as soon as you are made aware that an active customer has filed for bankruptcy
- Read all official documents received in connection with the bankruptcy to be sure no action is required by you / your company
- Once you are aware a bankruptcy has been filed, immediately print out two copies of: the account statement, all invoices, credits, debits and chargebacks.
- If you decide to sell to the bankrupt customer, do so on a separate account. Co mingling pre-petition sales, credits and payments can cause confusion so make the time to create a new account for post-petition sales
- Remember that you are under no obligation to offer a bankrupt customer open account terms, and doing so may put you and your company at risk. Post petition administrative priorities in bankruptcy do not guarantee you will be paid
- Always take time to perform an autopsy on a bankrupt account. The goal is to see if there were indications of serious financial problems, and what you might have done to reduce the loss
© 2008 by Michael C. Dennis. All Rights Reserved.