"going concern" question - U.S. corporation can't pay us

[WonnabeBiker]

Work was performed last year. they have been making several small payments. For April 1st, $ 1,000 had been promised but only $ 600 materialized.

At this point, it is clear they ran out of cash (or are playing games).

Q: Does anyone know if it's legal for a U.S. corporation to continue if they ran out of money? Not paying for labor they used is the pits, JMHO.

Hope someone will know the answer.

Q2: How would you try to collect in the U.S.? Start with filing a report with the 3 main CRAs? Or does that require a judgment??

Cheers!

[Carmine6]

If you're being paid something, then best thing to do is keep up the pressure. Unless you have the ability to sue them, as in you're willing to spend the time and money, and able to show up in court, then that's about all you'll likely be able to do.

If it fell under the small claims court limit in whatever state they're in, it could be pretty cheap to file since you file it yourself. But if you're in Thailand, that's probably not possible, plus you'd have to show up for the court date. You could also probably find a local attorney there to send a letter to try to scare them, but that's not going to be cheap considering it is just a letter. And there'd be no weight behind it, other than it might look like you are one step closer to suing them.

You could try contacting the credit agencies and see what you could report as a creditor. Dunn & Bradstreet is known as a business credit rating agency. Probably something at the others. But better to try to talk them into paying as all you'll get is a little satisfaction from reporting, and not cash.

On a practical basis, there's not much you can do if they are insolvent. There are no insolvency police where you report the company and they go shut it down and arrest the owners. Creditors can force a company into bankruptcy as a remedy if they can convince a judge to issue the order, but by the time that happens, there's not a lot to recover. The more typical path is the company files on its own under pressure from the largest creditors.

You do not want to see anything happen involving bankruptcy as you'll likely not see anything, or if so, then a tiny fraction and not for quite a while.