In the new Legal Forum Column, BGD attorney April A. Wimberg discussed bankruptcy filings. Read his advice below and don’t miss our monthly Legal Forum Column in Louisville Business First.
Bankruptcy filings are expected to rise in 2016. Are there any steps I should take to protect myself and my business?
After one of the slowest years for corporate bankruptcy filings, all indicators point to filings heating up in 2016. Consider the following five steps to help protect yourself and your assets. First, when extending credit, take a security interest in the debtor’s property. Second, file your security interests and liens timely. You are not guaranteed payment, but it puts you further ahead of other creditors. Third, get a personal guarantee from borrowers. Fourth, watch your accounts receivables. If customers become behind on their accounts and ask for more credit, ask questions. If a customer requests payment extensions which are not driven from competition, don’t extend payment terms. Last, talk to bankruptcy counsel early on; timing is everything in a bankruptcy. The bankruptcy rules have many time-sensitive deadlines that effect what property is part of bankruptcy estate and who gets paid from the estate.