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When Your Individual Client Files for Bankruptcy:

What happens if a client declares bankruptcy?
For example, 3 percent if paid within 10 days, 2 percent in 30 days, and net regular terms for 60 days. Having a client declare bankruptcy is a risk you take in business, but if you get paid earlier or on time, there won't be so much money outstanding if they do file.
How can an attorney help a client file for bankruptcy?
An attorney can help review your contract and ensure compliance with bankruptcy rules. Receiving notice that a client has filed for bankruptcy starts the clock for creditors who’ll need to navigate what are often unfamiliar proceedings.
What happens if you file a lawsuit against a client?
Even if you filed a lawsuit against the client, it gets stayed until the bankruptcy is completed. You can, however, contact the attorney or court appointed trustee to work out an arrangement on how your debt is handled in the bankruptcy, says Ring, who is the author of 102 Things Your Need to Know Before You File Bankruptcy.
What happens in a Chapter 11 bankruptcy?
Chapter 11 cases typically involve active participation by creditors. In Chapter 11 cases, the debtor can file a plan that outlines the debtor's proposal to modify and repay the debtor's debts. Once a plan has been "confirmed" (that is, approved by the Bankruptcy Court), payments are made according to the plan's terms.

What happens if a client declares bankruptcy?