Bankruptcy Law/Bad debtor


Dear Mr. Horner,

I am currently running a small business selling spare parts to another company on 30 days credit term. It has been over 60 days and the debt has yet to be settled. 50% deposit was paid initially upon delivery but the remaining sum is not. Now the sum isn't large and I am tired of all the follow-up calls and I don't want to use lawyer for this "small" stuff. If I make it public disclosing this bad debt online at every social media like facebook and others so that other small businesses like me dealing with (or will deal with) this bad debtor may know it to be a bad paymaster and refuse to do business with it, will I be risking lawsuit from such disclosure? By the way, I have the signed invoice to prove this is not some made up stuff. Is there any section of the law that shines light on such matter? If I insist on such disclosure approach, do you have any suggestion on making this legally acceptable?

I would not advise doing anything public other than a small claims suit.  What you should do next is send a letter to the owner of this business advising them that $x is due and you're certain it's an oversight but you need paid in the next 10 days.   On day 11 when the money doesn't come in, send letter number 2, that it appears you are not going to pay the balance owed of $x without court action.   If I don't have that amount in my office by close of business (5 days) I will be forced to take legal action to collect the debt.

Day 6 when it doesn't come in you have a choice -- take him to small claims court where no lawyers are allowed, get a judgment then attach his bank account;  or turn it over to a collection agency which will collect for a % of the debt.

SOMETIMES these collection agencies won't charge if they get the money in response to their first demand;  ask if there is a reduced fee if that happens.

Do not rely on social media -- you might get sued by him.

Otherwise I wouldn't bother with any more phone calls and would of course not deal with these people except on a COD basis, assuming you want to continue dealing with them.  I probably would not.  

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Consumer bankruptcy questions invited. I've been filing Chapter 7, 11 and 13 cases since 1985 in Calif and Arizona. I do NOT do homework questions. Let me know what state you're located in when you write. My bankruptcy practice is limited to California and Arizona but inquiries from other states are welcome. Your local jurisdiction determines exemptions. Find more background information at our website, Individual Chapter 11 and small business chapter 11 questions invited. We can also advise on the creditor's side if for example you have a fraud case, money judgment etc against someone who has filed (or is threatening) bankruptcy. We have filed and defended numerous adversary complaints in bankruptcy court and opposed trustees' demands for turnover of assets from time to time.


My partners and I have filed over 5000 consumer and small business cases to date in California and Arizona.

I've been a member of the California bar since 1984 and Arizona since 2004; also a member of the National Association of Consumer Bankruptcy Attorneys, Bankruptcy section of the Arizona State Bar, Tucson Association of Consumer Bankruptcy Attorneys, Arizona Consumer Bankruptcy Counsel and American Hellenic Educational and Progressive Association (AHEPA).

I've written a booklet on land trusts for real estate owners, players and dealers, and co-authored a special edition of "Stop Sitting on Your Assets". I was a writer of a monthly law review article relating to California real estate issues and pending and recently enacted legislation.

Attorney at law, experienced in trial procedures, adversary complaints filed and defended and numerous claims objection proceedings as well as filing cases for consumer and small business debtors.

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