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Can you get paid if your U.S. customer files for bankruptcy?

June 3, 2010 - Tags: Export, Sales

Istock 000000907327xsmallAs an exporter, you take on a certain amount of risk when you ship goods outside of Canada prior to receiving payment. In fact, until the money comes in, you're at the mercy of your customer.

The U.S. economy has seen a jump in the number of companies that have filed for bankruptcy protection (Chapter 11) over the past few years. If you export to a U.S. business, be aware of your options should the owner file for bankruptcy prior to paying you.

In his article "What to do if your U.S. customer runs for bankruptcy cover," Denis L'Heureux, Regional Vice-President, Export Development Canada, offers his advice on how to handle this dicey situation. He explains that there are actions you can take to help minimize your losses, should these circumstances arise, such as filing a Proof of Claims with the bankruptcy court.

If you're looking for more information on exporting goods or services from Canada, check out our Exporting section.

Comments

If I get paid as an unsecured creditor from a company in Chapter 11 do I have to give the money back? Is there any duty on the renewed company to pay the debts once the company is restructed and no longer under chapter 11?

By Myron on July 19, 2010

Hi Myron:

Chapter 11 is a Chapter of the Unites States Bankruptcy Code. For more information, you may want to contact a lawyer who specializes in bankruptcy law or a trustee in Bankruptcy. The Industry Canada website has a directory for trustees in bankruptcy for throughout Canada. Contact a trustee in your area who can help to further respond to your specific questions on bankruptcy law.”

By Canada Business on July 23, 2010

Bonjour
J’ai exporté de la marchandise à une société americaine.
L’acheteur a deja recu la marchandise.
Le mode de reglement etant par virement à 90 jours date du B/L.
Je n’ai pas d’assurance.
Aujourd’hui le client ne paye pas sous pretexte qu’il n’a pas pu vendre la marchandise.
Est ce qu’il y a un moyen de l’attaquer en justice, et l’obliger à regler ces factures.
Merci.

By Nader on November 26, 2010

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