Commercial Collections Blog

When a debtor files for bankruptcy, whether it be under Chapter 7, 11, or 13, and whether it be a voluntary filing or involuntary filing, “all entities” are automatically and immediately stayed from taking any action or continuing any legal action against the debtor. This includes attempts to collect debt from the debtor by any party. This also applies to the enforcement of liens against the debtor’s property. This stay also relates to repossessions of property. Stay ahead of the situation, our Commercial Collections department can provide you with more information.

Technorati Tags bankruptcy, BANKRUPTCY PROTECTION, commerical collections

Character: The timeliness in which you fulfill your obligations, the way you treat your customers and employees and the way you take responsibility are key characteristics when considering extending credit to a company (corporation, proprietorship, etc.).

Capacity: What is the company’s borrowing record? Are payments made according to terms? How much debt can the company handle and what are its financial ratios, all deal with the capacity of a debtor.

Capital: What type of financial commitment has a company made to its business? How well capitalized is the firm? These are important questions to ask when considering extending credit.

Conditions: What are the current economic conditions and how sensitive is the debtor to downturns in the economy, are questions you should ask that can make a difference when answering the question, “Should I extend credit to this company?”

Collateral: What assets does the company have that they can pledge as collateral? Equipment, real estate even inventory and accounts receivable are just some assets you should look to when the extension of credit is based upon a less than perfect credit payment history and financial condition. http://www.burtcollect.com/

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One of the biggest differences between purchasing assets from distressed companies that are not operating under bankruptcy protection is that investors often do not proceed with the necessary due diligence. Many investors in these non-bankrupt companies feel the need to take quick advantage of the situation and let that guide them. Even if a buyer knows the market, taking the necessary amount of time to properly examine the distressed company’s books and records, if there are lien creditors, etc. should take precedence. If you are considering buying a company that is in bankruptcy, please consider this points:

• Find a company that has filed for protection from bankruptcy. Get financial information about the company as possible.
• Find the companies that are engage with your company prospect  and the amount of debt.   Collect information on creditors, key stakeholders and suppliers as much as possible.
• Contact an attorney who knows and is experience in bankruptcy, to make this as easy as possible. Speed and efficiency, are essential when you buy a bankrupt company.
• Get paperwork ready for the financing in order.  Write your business plan to indicate how you will create a positive balance.
• Prepare yourself and obtain the necessary documents and submit to the bankruptcy court.
• Stick with your plan, create an action plan to help solve problems that may arise from customers, suppliers and employees who remain after the purchase of the company.
• Ask your attorney to provide written documentation and an offer by the bankrupt before the Tribunal.
• Stay Focus. Secure your finances. Create an original date of payment to creditors. Making payments to suppliers, to show good faith that you have funds available. Begins to run the operation.

Debt can have many faces, please create your plan, be consistent and stay focus. Make sure you know the New bankruptcy laws for your state.

Technorati Tags bankruptcy, BANKRUPTCY PROTECTION, commerical collections