I have a problem with a supplier who I paid in advance for goods which have not been delivered. The supplier's bank account has been frozen. How can I get my money back?
2 Answers from Attorneys
Frozen by whom? The bank? A court? One doesn't ordinarily begin a collection process by attacking the debtor's bank account; by the way; you'd need to go to court first.
Step one would be to determine whether the supplier has filed for bankruptcy protection. If so, keep in mind that deposits and payments in advance for goods and the like may be entitled to some degree of priority. I do not practice bankruptcy law, so I can't be too certain or specific. If the amount in question warrants, I'd suggest retaining a bankruptcy attorney who represents creditors to handle filing your claim.
If specific goods have been identified to your order, title may have passed and you may have a claim of ownership of said goods under the Commercial Code. This might be a bit unusual, but it's possible. In that case, you can file a lawsuit for "claim and delivery" or "replevin" to obtain physical possession of the goods.
In general, a lawyer would need a little more information about the supplier's problem to give you further advice. If you can send me (off line) the supplier's name (and any other identifying information you might have), I can look to see whether there is a bankruptcy on file, what chapter it's under, the name and address of the trustee, and other useful information.
You probably won't. Sounds like a bankruptcy in his future, and yours. You can file a Claim in his Bankruptcy once you are notified of the filing. You'll share whatever assets he has left after the filing, if any, pro rata with all other unsecured creditors, all of whom are at the end of the list behind taxes, his employees, and secured creditors. Hope this loss doesn't push you into BK. Alternatively, you can and probably should file suit for breach of contract, and fraud, now, to start establishing your claim. Just don't spend a ton of money doing so, and don't expect to get a judgment or collect, unless you discover that he isn't going bankrupt.
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