Do I Still Owe Money to a Company That Went Bankrupt

**g8rmann** · 03-31-2009, 05:18 PM

I joined a golf club that filed bankrupcy. I still owe them money and now a collection agency wants the full amount as part of the bankrupcy proceedings. if they can't hold up their end of the contract, do I still owe them money? Do I have any way out?

Thanks

jk · 03-31-2009, 05:53 PM

How do you know they can't hold up their end of the deal? Is this a reorganization or complete liquidation?

do you owe some sort of arrears? If so, you simply need to pay that portion of the debt. If you believe they are seeking payments for the future and the club (or its successor) cannot honor a continued contract, then argue that point with them.

**g8rmann** · 03-31-2009, 06:53 PM

It's a liquidation. they can't continue to offer services. I joined with a deferred payment option where I was supposed to start making monthly payments in June. since they cant deliver anything, I don't feel I should have to pay them. Afterall, its a service to use their facility that doesn't exist anymore.

jk · 03-31-2009, 08:45 PM

but, did you use their facility already? If so, then you would owe for the time you used it.

in addition; another entity could purchase the club with contracts in force. If this happened, you would still be required to continue your contract which, of course, you would be required to pay.

**josh208** · 04-17-2009, 12:08 PM

I could be wrong but it seems to me that an important element how the deal was structured.

If you signed a finance agreement with a 3rd party which then paid the club (A lot of gym memberships work this way) then you are probably still on the hook. You're recourse would be against the club which would mean you're screwed.

If you're contract was strictly between you and the club, and the club is shutdown (never mind the notion that someone may at some point in the future buy and re-open it) then they are probably in breech and you should be off the hook.

If the collection agency bought your contract from the club or as a liquidated asset then they may be entitled to collect on the contract but by the same token they may be responsible for the club's obligations... If they claim to own the contract try asking them to set up a T-time for you. If they can't then tell them they are in breech.