The COVID-19 pandemic accelerated and deepened the recession that was predicted to start in the latter half of 2020. One result was a significant number of bankruptcy filings, especially in sectors that were already struggling, with no sign that the pace will slacken in 2021. Your client unwittingly may be brought into another entity’s bankruptcy case if a customer or vendor files for bankruptcy.
It is important to understand some bankruptcy basics to help your creditor client understand the process and protect its interests while the client determines if hiring a bankruptcy specialist is necessary. This article addresses only events that commonly occur early in a bankruptcy case and it is by no means a comprehensive list of all the bankruptcy-related events.