Law advice please?

I own a small company, and we had a customer in 1998, who ordered a system for $6,000. They never paid us and kept the equipment. In 2000 they filed chapter 13 bankruptcy. We never got paid. 1 month ago the same company placed an order with us for $4000. My question is, is it legal for us to put that $4000 towards their old debt and not ship them what they ordered? Or are we screwed on that old debt because they filed chapter 13? Their lawyer told us if we didn’t produce the equipment or refund their money we could be sued. If that is true, it doesn’t seem to be fair, when they made money on us back then and we received nothing. Any thoughts?

This entry was posted on Thursday, November 20th, 2008 at 1:43 pm and is filed under Bankruptcy Law. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

5 Responses to “Law advice please?”

1. ihateinternetdating Says:
   November 21st, 2008 at 10:41 am

   A bankruptcy draws a line in the sand, so to speak, and the court’s ruling is final, so you’re stuck with the payments the court ordered in the final decree. If you never got paid you can go to the court and ask for that money, and that’s what you should do. (A 13 doesn’t wipe the slate clean like a chapter 7.)

   You do have to either give the money back or ship the goods. Why in the name of God would you take another order from them to begin with???

2. gforce Says:
   November 21st, 2008 at 3:33 pm

   When a company applies for bankruptcy its debts are either paid off or canceled. You cannot reclaim your money, however it would be wise to demand payment up front this time.

3. Polifia? Says:
   November 21st, 2008 at 8:51 pm

   Yes, they have standing to sue. Get legal assistance for your commercial matters, it may save your money a lot of money in the long run.

4. kikidismom Says:
   November 22nd, 2008 at 4:07 pm

   If the debts which they discharged in bankruptcy included the debt for your equipment, the debt is gone and you can’t recoup. HOWEVER, in order to prevent history from repeating itself, you should require this fellow to give you payment in advance or get a security interest in it (or lease it to him for 1/5 of the price per year and at the end of the 5 yr. lease he can buy it for $1) so you don’t get screwed again.

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   November 25th, 2008 at 5:13 pm

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