Q: I own a small B2B service business. I usually don't have a problem with collecting debt but with so many people around filing for bankruptcy, I want to learn what my rights are on collecting an outstanding debt from a customer who has filed for Chapter 7?

A: If your client filed for Bankruptcy you have to “stay” all proceedings against her while the bankruptcy is pending. Beware, because you can’t even contact her any more about the debt and there are stiff penalties if you do. Since this is likely a Chapter 7 Bankruptcy and your claim is an unsecured debt arising from a contract through your business, it will most probably be discharged in bankruptcy court unless you can prove that the debt was incurred through fraud or “willful and malicious acts”. (Some other exemptions include child & spousal support, taxes, student loans, criminal restitution and judgments arising from drunk driving.) Proving fraud or “willful and malicious acts” is a fairly high burden. If you truly think you can meet it and you think your client has the assets to pay her creditors, you can file a non-dischargeability action in bankruptcy court within 60 days of the first meeting of the creditors or the debt is discharged. Of course, this addresses a very limited situation and as always you should always consult with a bankruptcy attorney before taking any action.