Legal Question in Bankruptcy in Virginia

Collection Agency wants to file Bankruptcy

I own a collection agency and have found myself "head over heals" in delinquent debt. I am an absentee owner and have been plagued by dishonest employees (I have 2 employees) who will not go to work and money is constantly missing. Some of my clients have not been paid (their funds collected by us less our commissions). It has now gotten to the point whereas I have no where else to turn and can not trust the 2 employees I have working there and can not afford to keep getting deeper and deeper into debt. The money that I receive from my full time job is going to pay employees salarys amd I am getting depressed. Question: I want to file a Chapter 7 bankruptcy and go on with my life. Due to the fact that I am a collection agency and have no contracts with my clients, can I be held personally liable for the commissions due the clients? I am not attempting fraud, etc. it's just that I don't know what else to do. Thank you very much for your opinion. My company resides in Virginia


Asked on 5/26/98, 10:30 am

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Collection Agency bankruptcy

Whether you can or cannot be held personally liable for the amounts owed to your clients depends on the facts. If you personally had anything to do with their money disappearing, the answer is yes. If not, it is probably no. You need to seek counsel immediately. Those funds were held it trust, so your failure toinsist that they be handled accordingly couldcause problems. (Unfortunately I did not getthis message until today, although it lookslike you posted it to Lawguru.com some time ago).

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Answered on 7/15/98, 7:37 pm


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