The Profitability of Bankruptcy

At work, I’m the guy who deals with accounts payable. I’m the guy that gets the letters from the bankruptcy court that says: “This person is filing for bankruptcy. How much do they owe you?” I then tell them the relatively small amounts that are owed. Then, I’ll get a letter back, saying (in a sense) “The debtor can pay this much. He owes a metric butt ton to these other people. They’re going to get a pittance payment. You’re getting nothing.”

Today, I received a follow up letter regarding a business that went belly up. They owe my company $266.00. Though nothing is final, I’m sure I won’t see a penny of this. The follow up letter is letting me know of an upcoming meeting. The accounts for the company are asking for a shade under $409,000! The attorneys are asking for $575,000! And we’ll get nothing. I wonder how much the attorneys and accountants “wrote off” for this company…

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