Most businesses start with just enough money to last a few months of operations. Only after months or even a few years of operating the business are the gains realized. Therefore, it is just ordinary for any business entities or owners to have some debts incurring during operations. Now, what if you have invested some money as a loan to a bankrupt business? What if the business who owes you money is planning to file bankruptcy? Where are you left in this situation?

Do not fret; you still have some hope in collecting money from a bankrupt business that has owed a big chunk of your money or investments. There is a Fair Debt Collection Practices Act known as the FDCPA. This law is passed and made possible by the Congress. It helps in the regulation of methods for collection agencies; it can be used to collect money from debtors such as a bankrupt business. It can also help prevent creditors from using unethical procedure on collection process. Moreover, with the FDCPA, regulating collections and protecting the debtor is both achieved.

Guidelines on collecting debt money from a bankrupt business must be followed to get payments from them. The act applies to a variety of debts for collections such as billings, loans and credit cards. For the debtor to utilize the law, a better understanding of the law must be gained by debtors like you. Since there are also some debts that may not be covered in the law, different states in the United States have additional laws governing the creditors and debtors legal situations. A bankrupt business can also avoid being victimized with illegal methods on extracting payments.

Collectors of debts like you under this law are banned from being in contact with other relatives and employers of a bankrupt business aside from the co-signor of the loan. Threats on your debtors from you or intimidation from a representing lawyer are not allowed as well. Being someone who needs to collect money from a bankrupt business requires you to know this so that you can also avoid jeopardizing your chances on extracting payments from the business entity. This is essential because a bankrupt business will use any way to keep creditors off their back and you are one of them too. Even phone calls’ times are not allowed except on the working hours where a business transaction can be done. The reasonable calling time within any business entity, whether it is a bankrupt business or not is after 8 o’clock in the morning and before 9 o’clock in the evening. During the follow-up calls, profanity and racial discriminating terms are not allowed to be used in dealing with the collection.

These rules under the FDCPA are important especially when you are in a situation wherein a large amount of debt is involved in your collection. While it is really required for a bankrupt business to pay off their creditors, the proper procedures and methods are still needed to be followed.

© 2009, Bankrupt business. All rights reserved.

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5. Buying Assets off a Bankrupt Business
6. Buying a Bankrupt Business

This entry was posted on Sunday, August 2nd, 2009 at 12:44 pm and is filed under Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.