So Your Customer Has Filed for Bankruptcy…Now What?

Every year it seems from the end of January to the end of March is the opportune time for financially distressed companies to file proceedings in order to protect themselves from their creditors.  We are already seeing signs that bankruptcy season is upon us in Quebec with the recent notice from the Trustee of Maryse Victoriaville Inc.

There are a number of reasons why businesses fail. Perhaps they lose a major client, or they have a significant drop in business volume, maybe because a competitor becomes aggressive in their pricing. Perhaps productions costs increase significantly, and cash flow issues develop.

It can be a shock, and sometimes an insult when your customer can’t pay but credit insurance can protect you from the impact of your customers business challenges and if you’ve purchased insurance for this occasion “Now” is the time to make a claim before your insurer’s delays expire.

If you are making a claim the following documents will be required

  • A completed and signed Claim Form
  • Your Statement of Account
  • Copies of invoices, purchase orders, proofs of delivery
  • The Trustee’s List of Creditors showing the amount owing to you.

Note: If the amount showing on the Trustee’s list differs from yours, a confirmation from the Trustee will be needed by your insurer.

No one wants to be part of bankruptcy season but sometimes it finds us anyway. As a business, you have two choices. Protect your business with Receivables Insurance or be prepared to stand in line the other unsecured creditors waiting to receive a few cents on the dollar.

by Michelle Davy, President & Principal Broker, CreditAssur Inc. and RIAC Director

www.creditassur.ca