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In trying economic times, keeping abreast of your accounts receivable can be even more problematic than usual. Since a young age, we are all taught to be patient, but how patient should you be when it comes to your receivables.

There are two issues which are worth exploring. The first is to determine whether there is any realistic chance of voluntary payment from your debtor. There is no magic number, but statistically your chances of being paid diminish the older the debt becomes. You can turn to a good partner like RTT to help with your receivables problem. Our collection department is adept at helping you manage your accounts receivable problems in today’s challenging environment.

The other issue has to do with when you get paid. Understanding your customer and his/her financial situation is very important. Not only should you be concerned about being paid, but when you get paid as well. Suppliers who are not paid in the ordinary course of business can sometimes be subject to a Preference Action in Bankruptcy Court. If you get paid on an irregular basis, watch out. If your customer is on the brink and pays you because of loyalty or pressure, but not in the ordinary course of business and later files for bankruptcy, your payment can be subject to recovery by the debtor in possession or trustee in Bankruptcy court. There is a presumption that any payments made 90 days or more prior to the debtor filing for bankruptcy protection are preferences and therefore, payable back to the bankruptcy estate.

If you would like additional information, please contact Steve Taitz.

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