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View Full Version : Residential customer files bankruptcy - what to do?


Roger
09-01-2006, 08:48 PM
One of my residential mowing customers called me one day about 7 weeks ago, left a message: "I am going to have my husband do the mowing, please don't come to my home any longer." She went on to say that "since he is around the house, he can do it."

This lady has been a customer for about five years, and alway paid pretty well. This season was no different for the April invoice. I did notice her husband around the house sometimes when there to mow, unlike past years. We exchanged pleasantries a time or two, but nothing much.

After several letters with overdue Statements, each letter worded more strongly than the last, I finally got a response from the husband. Heretofore, all business communication had been with his wife. He explained they were in "extreme financail crisis" and went on to say they are filing for bankruptcy. Further, he said they didn't have the money to pay (about $500) now. He had lost his employment (reason why he was "around the house"), and his wife also lost a newly found job. In the past, she was not working outside the home.

He explained I was not included in the list of creditors because "we want to be sure that you get all the money your are owed, ... blah, blah, ... you have taken such great care of our property, ... blah, blah ...." He said that if we were on the list we probably would not get all our money.

His plan was to pay me something each month, starting in September, until it is all paid. He said he would not give me any timetable, nor how much they could pay, but that was their plan.

I have never had this happen, nor have I known anybody closely who has filed for bankruptcy. I expect they are filing Chapter 13, reorganization of finances, not Chapter 7, liquidation.

However, I now believe his plan is a ploy to eliminate any chance of me getting any money. I have talked to a couple of CPAs and another person in the world of finance (none of them bankruptcy attorneys - looking at finding one to speak with), and all believe that I am a target of falsehoods. The understanding is that all debts MUST be listed, and a court appointed trustee will oversee ALL expenditures. The man's "pay you on the side, outside the bankruptcy proceedings" does not seem possible. The trustee will not permit him to pay me, while others on the creditor list have first dibs on any money. He will always have an excuse not to pay, "... the trustee says there are other creditors to be paid this month."

Has anybody had a similar experience? Am I wrong to be skeptical of his plan? Am I better to be on the creditor list, and if so, where can I learn about the bankruptcy filing?

I suspect my outstanding balance is a small amount compared to other outstanding debts. But, if there is any chance of getting the money, I want to do so. However, for the amount involved, I cannot afford much attorney time to help the wandering through the process.

Thanks.

P.S. It is entirely possible the whole story of the bankruptcy is a ploy itself. How do I learn of the public record of their filing? They may just have made up the story, with the intent of opting out of paying me anything. I am cynical because the "husband will do the mowing" was a falsehood. I have seen a neighborhood teenager mowing their lawn, albeit much less often than I was mowing. The man did say "... we stopped your services because we didn't want to run up your bill any more ... we hired somebody else." So, he was truthful in that part, unlike his wife.

firefightergw
09-01-2006, 10:06 PM
Go down to the county courthouse and file a lien on his property. I assume you have a contract that they signed when you began service. If they are truly in such financial ruin, they may be forced to sell the house just to make ends meet. You will get paid when they do. Of course, I am not an attorney but this is how I understand it. Good Luck!

MMLawn
09-01-2006, 10:19 PM
Go down to the county courthouse and file a lien on his property.


If he has filed Bankruptcy you CANNOT do that, as it is illegal because he now has a Court Issue Stay that prevents any debt collection efforts, judgements or liens.


As to the question, yes it would be illegal for him to pay you outside of his bankruptcy plan. If he does and the court fines out they can seize any money he gave you and give it to his listed creditors. Basically you're screwed now and out the $500

olderthandirt
09-01-2006, 10:32 PM
If he has filed Bankruptcy you CANNOT do that, as it is illegal because he now has a Court Issue Stay that prevents any debt collection efforts, judgements or liens.


As to the question, yes it would be illegal for him to pay you outside of his bankruptcy plan. If he does and the court fines out they can seize any money he gave you and give it to his listed creditors. Basically you're screwed now and out the $500

You are correct about everything you posted [as usual] But if I was the lawn boy on this I'd make damn sure that if they were liquidating or even refinancing it would not be with a lush green lawn :drinkup: :drinkup: maybe screwed out of $500 but the look of the lawn? priceless :laugh:

6'7 330
09-01-2006, 10:46 PM
When a chain of electronic's stores filed bankruptcy, ouch! Landscapers were way down on the list of creditors .

Brianslawn
09-02-2006, 12:40 AM
you are so fu@%in screwed. never do any work that you were not paid for in advance.

General Landscaping
09-02-2006, 01:42 AM
Is it too late to get on his creditor list?

If you think all is lost; test his "good guy" story and offer to trade him out of some assets..... couch, guns, mountain bikes, shop tools, etc. I'm sure he didn't get into that position by just buying the bare essentials.

hoyboy
09-02-2006, 10:22 AM
It won't be too late to get on the creditor's list, but for $500 it probably isn't worth the hassle. Even if you do get on the list, by the time the lawyers get their share, the secured parties get their share, and the rest is divied up...no much left. Usually, you're talking pennies on the dollar.

In this case, you may actually be better off taking their offer to try to get something on the side. If they give you anything at all, it's probably more than you will get in BK proceedings.

Lumberjack
09-02-2006, 10:40 AM
If your not on the list then the customer is not protected by the courts from you. proceed with collections.....


Some of this depends on the type of bankruptcy filed. theres a chapter 7 and a chapter 13.

BBN
09-02-2006, 11:01 AM
Contact his attorney. Find out if you are listed amongst his debts he's trying to wipe out and if you are handle it through his attorney. Also if you are listed in the bankruptcy you can show up at the courthouse on his day in court and contest it but you really need to talk to an attorney and find out if he's trying to rid your debt.

rob7233
09-03-2006, 10:05 AM
This really depends how they are filing the bankruptcy. Let me explain. They can first file for chapter 7 to eliminate all unsecured debts (you) and leave it at that. If your'e on THAT list, your done. However, filing bankruptcy releases you from the LEGAL obligation of paying BUT if you choose to take the moral high ground and pay someone regardless if listed in the Chapter 7 proceeding, you can. Nothing will stop you from doing that, if someone chooses to do so (not likely).

Now they can take that Chapter 7 and after that's done, follow up and file a Chapter 13 to reorganize any remaining debt (typically secured debts like mortgage arrearages etc). However, you can put anyone down that you'd like to be included on that plan to the Bankruptcy trustee BUT they must be listed to be paid. Under that plan the Trustee won't allow any further acceptance of additional debt that might jeopordize the completion of the payback plan without their (the trustee's) expressed permission.

Go ahead and ask the customer for their bankruptcy attorney's contact info and state that you'd like to get with him to work something out without further legal action. Ask for proof of the filing date. Ask the attorney's office for the website where can view the status of the filing. You can still have him (the attorney) accept your claim and file an amendment to the plan to include you. If it's a chapter 7 only, then he might include you afterall, especially after you called him to advise of it. You screwed yourself then. If the customer doesn't list you then they still will owe you but you got to try to view the filing to know for sure.

Mortgages and taxes do not get released within the plan however depending on your particular state laws the home might also be taken and not "safe" thru homestead laws like we have in Florida. I would inquire still about the possibility of filing a lien anyway. Looks like at this point you just don't have enough info on the intent and filing staus of these people. Keep in mind that filing Bankruptcy takes $$$ also which in some cases can be worked into the plan on a Chapter 13. However, Many people gather the info for the attorneys and say they have actually filed when the haven't yet since they are trying to come up with the additional cash for it. The attorney won't file the Bankruptcy on a IOU.....Especially with the Chapter 7. Don't waste any more time listening to these people since they may be trying to buy more time with you. Get the info you need from them and call>>>>>