The economy continues to struggle to mount a real recovery. Economists and banking experts argue about how to maintain the little bit of momentum we’ve seen over the last six months. From our view as Virginia creditors rights lawyers, we think there is a coming wave of preference claims that will surprise a lot of [...]

So Maybe We Now Know When A Claim Arises, But Can A Debtor Discharge The Claim? Although not admitting that it succumb to acknowledged “universal disapproval” of its 1984 decision in Avellino & Bienes v. M. Frenville Co. (Matter of M. Frenville Co) 744 F3d 332 (3rd Cir. 1984), the Third Circuit Court of Appeals [...]

On March 23, 2010, the U.S. Supreme Court issued a 9 – 0 opinion in United Student Aid Funds, v. Espinosa  (08-1134) in which the Court affirmed the 9th Circuit’s holding that a chapter 13 debtor can obtain a discharge of a student loan by including it in a chapter 13 plan, if the creditor fails [...]

We have been discussing preferential payments, defenses and avoidance tactics.  But what businesses care about most is getting paid for goods and services provided. This entry will discuss how to collect from a customer who has declared bankruptcy.   

We previously dissussed what preferences are and some common defenses.  Many small businesses may be wondering if there is any way to get your money, but avoid claims of preferential payment.   Unfortunately, there is no absolute, “slam dunk” way to avoid a bankruptcy preference claim risk. 

Yesterday we discussed preferential payments – payments made to an insolvent company within 90 days of the bankruptcy filing.  To more equitable or fairly divide the limited assets among the creditors, these payments must be returned to the debtor.  Your first question upon receiving a preference demand letter is likely to be:  Do I have to [...]