When a company you do business with files for bankruptcy, it can feel like a lost cause—right? But don’t worry; there are ways to recover at least part of your money. The key is understanding how bankruptcy works and what steps you can take.

In this piece, we’ll highlight how you can receive the money you lend such a company. You use no force; you just use the right channel using a debt collection agency USA.

What Happens When a Company Declares Bankruptcy?

Let’s break it down: 

When a company goes bankrupt, it usually follows one of two paths:

  • Chapter 7 Bankruptcy: The company shuts down completely, and its assets are sold to pay off creditors.
  • Chapter 11 Bankruptcy: The company tries to restructure its debts while continuing operations.

So, what does this mean for you? 

Suppose a company has declared Chapter 7; your chances of getting paid decrease significantly because secured creditors (banks and lenders) get paid first. If you are one of them, you are protected. If not, the process might be longer, but it is still possible if their asset value covers all the payments.

Under Chapter 11, you may still recover some or all of your outstanding payments.

Steps to Recover Your Money

Now, let’s get to the important part—how can you get your money back? Read on.

1. Check If You’re Listed as a Creditor

You might be thinking, How do I even know if I have a claim? When a company files for bankruptcy, they provide a list of all creditors. If you’re on that list, you’ll get notified. If not, you need to file a Proof of Claim with the bankruptcy court.

2. Understand Where You Stand in the Payment Hierarchy

Not all creditors are treated equally. The order typically looks like this:

  • Secured Creditors (banks, mortgage lenders, etc.)–Paid first
  • Priority Unsecured Creditors (employees, tax authorities)–Paid next
  • Unsecured Creditors (suppliers, service providers, etc.)–Paid last (this is where most businesses fall)

If you’re an unsecured creditor, the chances of full recovery are slim, but partial payments may still be possible.

3. Hire a Debt Collection Agency

Filing a claim is one thing, but actually recovering the money is another. This is where professional help comes in.

A leading debt collection agency USA, Atradius Collections, specializes in recovering debts from B2B transactions—including those involving SMEs and even bankrupt companies. Their expertise navigating complex bankruptcy cases can increase your chances of getting paid.

Should You Keep Trying or Cut Your Losses?

It’s tempting to give up—but should you? Here’s a quick test:

  • If the bankrupt company is restructuring (Chapter 11), stay involved.
  • If the company is liquidating (Chapter 7), weigh the effort versus potential recovery.
  • If the amount owed is substantial, a professional debt collection agency can help maximize recovery.

Final Thoughts

Recovering money from a bankrupt company isn’t easy, but it’s not impossible. Whether you’re an SME, B2B provider, or supplier, knowing your rights and getting professional help can make a difference. If you’re struggling with unpaid invoices, contact Atradius Collections Specialists—because getting paid shouldn’t be a guessing game!