You are here:

Business Debt/Collecting from a dissolving corporation

Advertisement

Expert: - 12/9/2007


Question
QUESTION: Illinois -- I have been receiving small payments from a company I did business with 2 years ago. They just informed me that they are dissolving the company, though the principal has stated in writing that he will honor the debt once he has a steady income again. Currently this corporation is in good standing. Should I be doing something legally to collect on this before the corporation is dissolved?

ANSWER: Since you have the payment agreement in writing, set up a payment schedule or plan and send that to them and include what will happen if payments are late or missed.

---------- FOLLOW-UP ----------

QUESTION: He has been paying (sporadically) for the past two years according to our agreement. Unfortunately, now he is informing me that his company is being dissolved and payments will stop. Are there steps my company should be taking BEFORE he dissolves his to guarantee further payments once the dissolution takes place?

Answer
K,

Getting a judgment may help in putting you in a better position to be paid if there are any business assets which may be liquidated. Verifying if the corp status has been revoked may determine who you pursue for the remaining balance. Verifying if there was a personal guarantee signed by someone in the company could changes things as well. If the balance is substantial you should seek out a collection attorney.

Business Debt

All Answers

Answers by Expert:

Ask Experts

Volunteer

Michelle Dunn

Expertise

As one of the Top 5 Women in Collections, one of the Top 50 Collection Professionals, and winner of the Business Excellence award, I can answer any questions about debt, debt collection, improving business credit, creating a credit policy, enforcing a credit policy and collecting on past due accounts. I can also answer questions in regards to starting a debt collection agency since I have been a bill collector for over 24 years, started and ran my own collection agency for 8 years, and maintain my 12 year old Credit & Collections Association for members of the credit & debt collection industry. I am also the author of the popular and award winning book "Starting a Collection Agency, how to make money collecting money" now on it's 3rd edition. This book has won a the Writers Digest self published award as well as the New York Book Festival Award. I am a repeat contributor to the Wall Street Journal, and have been featured on NPR, CNN, as well as many other national radio and television programs. I have also been featured in national publications such as the Wall Street Journal, Forbes, Smart Money, MSNBC and much more. I have 17 published books to my name and am an accomplished speaker and consultant. I currently write 9 columns for newspapers, magazines and online portals worldwide.

Experience

I have over 24 years experience in debt collection, I started and ran my own collection agency for 8 years and I am the founder & owner of my Credit & Collections Association that I founded in 1998. www.credit-and-collections.com

Organizations
My Credit & Collections Association, I was also a member of the American Collectors Association and Plymouth Chamber of Commerce for 11 years. I am a member of many writing groups as well as my local Women Inspiring Women chapter. I am a member of Know More Media as an expert for their blog on business credit.

Publications
Business NH Magazine, Smart Money Magazine, MSNBC, CNN, Forbes.com, The Wall Street Journal, Home Business Magazine, Entrepreneur Magazine and website, many books, newspapers and television programs as well.

Education/Credentials
I have written 17 books in my collecting money series and one for Entrepreneur Press called the Ultimate Credit and Collections Handbook. My newest book is being published by John Wiley & Sons in May titled, The Guide to Getting Paid, how to weed out bad paying customers, collect on past due balances and avoid bad debt. This book is also being sold to many colleges as a text book.

Awards and Honors
My book Starting a Collection Agency, how to make money collecting money won an award from Writers Digest and the 2007 New York Book Festival in the "How to" category. I have won 2 awards from Dun & Bradstreet and Governor Jean Shaheen. I was nominated as one of the Top 5 Women in Collections twice as well as having been selected as one of Collection Advisor's Top 50 Collection Professionals by my peers.

©2012 About.com, a part of The New York Times Company. All rights reserved.