Commercial Collections Blog

Business Bankruptcy Protection

When a debtor files for bankruptcy,  smaller businesses have some recourse — a “reclamation demand”.  A reclamation allows the creditor to demand  goods shipped to a debtor be returned IF the debtor files for Chapter 11 within a specified time period of when the goods were received.

If the goods can’t be returned, the seller’s unsecured claim may be converted into an “administrative expense priority claim”.  This move gives the claim a higher priority than ordinary unsecured creditors.

Businesses don’t have to wait for the bankruptcy filing in order to file a reclamation demand.   It can be filed if evidence is presented that the customer is officially insolvent.

Debt Collection News

  • NY AG Asks Court To Force Debt Collector To Hand Over Docs

    January 18, 2018
    Law360, New York (January 17, 2018, 10:45 PM EST) -- The New York Attorney General's Office on Wednesday asked a New York federal court to force a debt collection company and its owner to turn over financial documents, business records and other information that the agency is seeking in its suit ...
  • Lawmakers grapple with how to deal with Maine students who can't pay for lunch

    January 17, 2018
    She said it is not uncommon for schools or districts to end fiscal years with $7,000 or more of unpaid school lunch debt. King said her organization supports students being fed no matter what but needs guidance from the Legislature about debt collection, especially from families who seem able to pay but ...
  • ECB's Nouy 'inflexible' in meeting with Italian banks – sources

    January 17, 2018
    CEO Carlo Messina said on Wednesday the bank agreed with the need to speed up the reduction of bad debts. Other banks are also considering selling their debt collection units together with some of their bad debts, industry and financial sources have said. Analysts expect lenders to book more ...