Expert: Terry Leeders - 4/5/2009

Question
I performed services for a LLC in Colorado which still owes me money. He owes a total of $16000.00 in back services. Now that I have sent him a certified letter regarding court action he has replied that he will file bankruptcy so I don't see a dime. He has intentions of still running his business after bankruptcy. What are my rights?

Answer
You can collect on the debt (sue, garnish wages, freeze bank accts etc) until you receive actual notice of the bankruptcy filing -ie: you get his case #.  If that is the case, and there are assets in the case that are liquidated, you will receive a proof of claim form to file a claim and get paid a percentage of the debt.  If there are no assets, then the debt is dischargeable, unless it meets one of the exceptions to discharge.  You should consult with an attorney to review collection action you may want to take, and prepare for a bankruptcy filing, if he indeed intends to file.  Note, that many debtors say that they are filing, and never do, or don't file for some time, so there is a chance you might be able to collect some of the amount owed to you.