About Kathleen Eads Expertise Having spent almost a decade with a Commercial Collection agency, Kathleen
can answer questions related to collections~calls, motivating debtors to pay,
skip-tracing. She now works for National Skip Trace Network (NSTN), providing
premier technological Directory Assistance to the collections (www.nstn.net)
industry via the internet.
Experience
Past/Present clients Travelers Insurance, Nationwide Insurance, CNA Insurance, USF & G, Liberty Mutual, ACS, Asst Acceptance, Pinnacle, Penncro, Superior Asset Mgmt, PRM, Collins Financial, CBE Group
Collections Law - being in collection and trying to claim bankrupsy
Expert: Kathleen Eads - 4/7/2006
Question hi kathleen,
my husband and i own a medical practice and were accepting $5 payments for a $300.00 plus old account. i was forced to hand their account over to precollections. the patient has contacted my husband regarding removing them from precollection and they would pay their account in 3 months because "they want to settle their bill before their bankrupsy goes through". if they weren't concerned about the account in the past and now are in the process of bankrupsy, why would they worry about paying us or not. so the question is: is there some sort of rule in claiming bankrupcy that you can't be in collection with any of your bills? or does it matter if you are in collection and still can claim bankrupsy. i'm aware that the bankrupsy laws have been made more strigent over the last few months. we are in montana in case the laws are different from state to state.
thank you in advance for your advice,
eleckta
Answer You can file bankruptcy anytime you wish. The courts have to approve the plan before the debtors are released from debts owed to creditors. Because the laws have become so stringent, it's harder than ever to qualify. The case can make it all the way to court and be dismissed if the debtors:
1) Make too much money
2) Have assets/income larger than debts/outstanding obligations
The courts take a look at the overall picture, as it relates to secured and unsecured creditors. If your customer has any IRS debt, mortgages etc, you may be in a long wait (and may not see anything of the $300). You would be considered an unsecured creditor, unless you take the debtor to court, file a judgment and get a lein on their property. This would place you in a "secured" position, but is it worth the additional time & money you would spend to secure your interest? That's a question only you can answer.
You may want to ask the debtor for the name & number of the attorney to see if the attorney has been paid a retainer. They may be bluffing you just to get you to take their payment arrangement.
