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  1. #1
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    Default Can an Employee be Contacted by Debt Collectors for a Bankrupt Company

    A company closed and filed bankruptcy. An employee of the company went to work for a new company, founded by the wife of the owner of the bankrupt company. That employee is now being hounded by the bankrupt company's debt collectors. Why are they contacting an employee and how can he make them stop?

  2. #2
    Join Date
    Sep 2005
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    Default Re: Can an Employee be Contacted by Debt Collectors for a Bankrupt Company

    If multiple creditors are contacting an employee, then there is likely something more to the picture than their contacting the wrong person -- the employee may have signed contract in a manner that suggested that he was a principle or guarantor or, worse, the former company may have misrepresented the employee as a principal or guarantor in order to get credit from banks or suppliers that might otherwise have cut it off. It's even possible that the employee is the corporation's registered agent and that the contact is being made due to his being in that capacity -- if that's the case, he's likely receiving the notice but only because he's person designated by the corporation to receive legal notices on its behalf. If it were me, I would directly ask the bill collectors why they think that I'm liable for the debt and, if they suggest a contractual basis, ask for copies of the contract(s).

    If there is no case to be made that the employee is personally liable for the debt, and the bankrupt company is still in active bankruptcy proceedings, it would appear that they're engaged in improper debt collection activity, in violation of the bankruptcy court stay. That is something the employee and bankrupt business should discuss with the business's bankruptcy lawyer.

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