My client is in bankruptcy should I continue selling them?

The bankruptcy is a mechanism provided for in the legal system to ensure the future viability of a company that has financial problems to meet their payment obligations with creditors. The goal is to get as many copper creditors, and ensure that the company can continue to operate, so, even though this procedure ends often in liquidation of the company is a very important system to avoid this situation.

But what should I do if my client is in bankruptcy proceedings? Should I continue selling them or, conversely, stopped being your provider until your situation is resolved? Obviously, our company faces a risk that is convenient to manage carefully.

On the one hand, we must work with the committed debt, i.e. with those invoices whose payment has been deferred and, on the other hand, we must consider whether we continue to sell, at least until they solve their financial problems.

In the first case, it is essential that the creditor ensure that your bills are included within the passive mass of bankruptcy or within the set of debts contracted by the client. To do this, we must communicate within the prescribed period for it and track it.

In the second case, it is possible in principle continue selling to a company that is in bankruptcy from a legal point of view, as long as the resulting bankruptcy administration authorized. Once approved, the final decision on whether to cut supply or continue selling them is ours.

This decision is not unique, and depends on many circumstances, such as credit risk presented by the client in relation to our historical invoices issued and familiarity or trust that exists with the business or their needs. It will not be the same to sell a company with an unblemished credit history than another company that systematically violates its payment obligations to our society.

In any case, from the moment in which the appointment of the contest is known, should consider all decisions taken by the company, for which it is important to have the assistance of legal counsel in the different steps that will be undertake.