Suing a customer over an unpaid debt is certainly not the most enjoyable tasks a business owner endures, but it does have to be done sometimes to minimize losses. If I were suing a customer and I received a notice stating that the customer is filing for bankruptcy the first thing I would do is try to find out what type of bankruptcy the client is filing for. I would most certainly try to minimize my losses by trying to rearrange my case so that I could recuperate as much from the client as possible. I would try to do this without having to set up a court date because another court date means more hours away from work and more cost in terms of travel and paying a lawyer if I have one, not to mention court fees. On the day of court I would attempt to gain as much assets from the customer as legally possible by asking the courts to confiscate and liquidate said assets so that they could be paid to all the creditors the customer owes money to including myself of course. If these steps are not fully fulfilled so that the debt is not fully paid to me I would ask to mortgage the customers assets for the remaining debt amount so that if the customer cannot repay me in the future than I would be able to recover the remaining amount of debt owed to me (Clarkson, Miller, & Cross. 2012).

Part III Owning a corporation allows a business owners personal finances to be separate from the companies finances. When the corporation starts to accumulate too much debt that cannot be paid off, the owner has to start thinking of filing for bankruptcy. Having a closely held corporation that's in serious financial trouble with four other shareholders where the current debt load cannot be lowered by either paying them off or selling assets would seriously constitute me to look into filing for bankruptcy. If my company still had good contracts that could yield profitable results and I lived in the state for two years where my business is incorporated in than I would look into filing for Chapter 11 bankruptcy (Clarkson et al,. 2012). The first reason why Chapter 11 bankruptcy seems like the best option is because of the contracts that could yield profitable results, the business would have long-term revenues that will be higher than the liquidation value of the assets currently owned. After all, the reason bankruptcy had to be considered was because we could not get our current debt lowered by 50% to secure a loan from a lender, thus there isn't much value in liquefying assets. With a Chapter 11, creditors will get more money back by allowing me to reorganize and work out a payment plan. In turn, I would become a debtor in possession, that is, I would be allowed to maintain ownership and control of my assets including new assets coming in while continuing regular day to day operations (Clarkson et al,. 2012). Under Chapter 11, my company would still be allowed to make usual sales and purchases that are part of our normal business operations, but that is it. I wouldn't be allowed to invest in another company through my corporation or sell any major assets without the courts approval. This would be fine with me since I would be trying to work the contracts already set in place and utilize the profits that are coming in. Depending on how big the bankruptcy is I would follow the payment plan as best as I could to pay back all the creditors. Under Chapter 11, I would be allowed to lay off employees and renegotiate the collective bargaining agreement that were unduly burdensome to lower debt that is owed. Voiding out union contracts, contracts with suppliers, and any real estate leases would be completely within my realm of possibilities (Clarkson et al,. 2012). Avoiding certain purchases and payments that happened 90 days before bankruptcy is allowed under Chapter 11. Furthermore, some payments could be returned to be and become part of my reorganizational plan. This will keep me from manipulating any assets and giving any preference to any creditors. The reorganization plan must be voted on by the companies stockholders and even if it's voted down, the court could approve the plan. Stockholders are the last ones to get paid and creditors would most likely approve any plan that involves them getting a check to lower the debt owed to them. Furthermore, all stocks will be pretty much worthless once the Chapter 11 bankruptcy is certified. It is also my last option to get out of debt, so the plan must be followed exactly the way it is laid out (Clarkson et al,. 2012).. Filing for bankruptcy is not a crime. Sometimes it is necessary because of mismanagement of finances that can occur while taking on too many risks. As long as a company recognizes that it has to file for bankruptcy after all other options are explored, any plan set forth must be followed and no new risks must be taken. This is to ensure the longevity of the company and the sooner a company gets out of bankruptcy the better chance they have of succeeding and having their stock values go back up. The number one reason a business is started is so that a profit is made and when profits are being made a company has to rethink its strategy and sometimes starting all over again is a viable option (Clarkson et al,. 2012).

References: Clarkson, K.W., Miller, R.L., & Cross, F.B. (2012). Baker College Law 312 – Advanced business law (12th ed.). Mason, OH: Cengage Learning.