Attempting to recover a debt from a customer can be very challenging, and business owners have a difficult choice to make when a customer does not pay their bill: do you pursue the customer or not? What happens when the customer files bankruptcy? At that point, you have to decide if it is worth your time to go after them for the debt.
In some cases, collecting debts can take a long time and cost more money than it’s worth, and you have to evaluate whether you will be successful in collecting the debt. So let’s talk about your chances of success.
What are the odds?
Based on your past knowledge of the debtor or on your review of the debtor’s bankruptcy paperwork, you may have formed an opinion about the debtor’s financial prospects. For instance, is the debtor likely to have an overseas bank account, a hidden boat, or is the debtor someone who’s truly down on his or her luck with nothing left? To evaluate whether you will be successful in collecting the debt, take the following into consideration:
- Your active participation in developing a reorganization plan (in a Chapter 11 or 13 case) may lead to a better deal for you and other creditors.
- If you’ve remained actively involved in the case, you will be among those who ultimately benefit because most times the bankruptcy trustee will be looking for hidden assets and income.
- Reorganization cases take many months to complete, during which time the debtor may get a pay raise, collect an inheritance, or win a lawsuit, all of which will increase the amount of money available to you and other creditors.
Collecting unpaid debts are essential to the success of any business. Texas attorney Andrew Weisblatt is a skilled Houston B2B business collections attorney who understands how to effectively collect from businesses that may be reluctant or unable to pay their outstanding financial obligations. To schedule an appointment with Mr. Weisblatt, call our Houston office today at 713-666-1981.
Attorney Andrew Weisblatt
Mr. Weisblatt has practiced continuously since becoming licensed in 1992 and has represented businesses ranging in size from one person start-up ventures to multi-national corporations employing hundreds of people in multiple countries. From 2005 through 2009 Mr. Weisblatt was in-house counsel and chief operating officer of a multi-national corporation in the steel products industry. That in-house position provided valuable insight into how businesses work and what they actually need from their lawyers – both in-house and outside counsel.