Is it possible to get a debt paid back from a company that files for bankruptcy?

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It is always possible that a debtor company may file for bankruptcy if confronted with a debt that it cannot pay.  However, this does not necessarily mean that the creditor will not be able to collect at lease part of the debt.  A creditor should be given proper notice before the start of a bankruptcy hearing and will have a chance to claim part of the bankrupt debtor’s assets.

In bankruptcy court, the creditors will list their claims against the debtor company and the judge will order distribution to be made to each creditor from the remaining assets of the debtor company.  The amount of these distributions will vary depending on the status of each creditor and the remaining assets of the debtor company.  If a creditor is not given proper notice of th bankruptcy hearing and does not participate, then the creditor’s debt will remain valid in full even after the bankruptcy has been completed.

If you are worried that you may not be able to collect on a liability due to the bankruptcy of the debtor company, please contact our office to set up a consultation to explore your options and ensure maximum recovery of the debt.