Daily Archives: December 20, 2012

Can A Bankrupt Company/Person Sue Me?

  Hell, yes.

Just because a person or company, or even a college, has filed bankruptcy, does not mean you are off the hook if you owe them money.

Lon Morris College filed Chapter 11 bankruptcy, and expects to get as much as one million dollars by suing students for unpaid tuition.

These are not student loans, but tuition that has not been collected.

Well, as with any business, if you are giving away your product or services, you will eventually go broke.

I was surprised to learn, in the article by Ben Tinsley of the Jacksonville Daily Progress, that:

Yale University and Temple University go as far as to share the same debt collections attorney.

Yale and Temple are not close to bankruptcy.  The debtor, the one who files bankruptcy, is the one who gets the automatic stay and protection of the bankruptcy court from its creditors.

The debtor in possession in Chapter 11 bankruptcy cases, like the college, and the trustee, in Chapter 7 bankruptcy cases, has the right to sue to collect money owed to the bankrupt entity.

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3 Responses to Can A Bankrupt Company/Person Sue Me?

  1. Hi there! This post could not be written any better!

    Reading through this post reminds me of my old
    room mate! He always kept chatting about this. I will forward this write-up to him.
    Fairly certain he will have a good read. Thank you for sharing!