Customer Threatening Bankruptcy

Is giving Bankruptcy notice an easy way to escape?

[agbenny]

A customer who is in USA, for whom we did a work for 6 months – he was paying well last year, and since we had a good payment history, we were doing lot of work and 2 months before he started hiding himself, promising he will pay soon, soon.

We never got our payments, and now someone emailed me saying that he is my customers friend wrote me that the customer is not well, and he if we urge him for payments he may show us bankruptcy.

We are from India, and I believe many could have faced such difficult situation like us; But my question is easy to show a bankruptcy notice and escape from all one owe to others. Is there no legal way to prevent this and save people who worked for them hardly and honestly?

Escrow services are good to handle outsourcing projects – But for people like this clients who contact us directly, do business seriously, but vanish at one point of time, after making good faith is critical to the business. We can run a small company in India with one’s monthly salary in the USA.

Someone asked us, why not we have an office in the USA to handle payments? But opening an office in USA and keeping all legal presence in the USA is not cost effective, so that’s not an option to many companies in India.

Apart from this I seek another advice: How much % of service charge we can give if some debt recovery firm could help us to get our money back?

Thanks in advance to any advice you give.

[Easy_Coder]

Is your customer telling you that they're indeed filing for bankruptcy or just saying 'they might file'?

You can't do the former in the US and then not file, if that's happenning you might have some leverage and should probably contact a lawyer that operates in the vacinity of your client.

[Automan Empire]

How much you want to bet that the "friend" is really the customer?

This is your cue to REDOUBLE your collection efforts. If he does indeed go into BK, better to be high on the list of creditors. Better still to collect before that happens, if it is indeed true.

Your only recourse may be a debt collector. If it comes to that, choose carefully as it would hurt more than double to be scammed twice here.

Opening a USA office is a great way to eat up capital like you never dreamed in India. Such an office would HAVE to have a profitable revenue stream in place before opening, otherwise it is a big gamble. OTOH, in my very limited experience, Indian people are pleasant to deal with; wonder what it would be like for ME to open an office there? :)