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Getting Back What You’re Owed From Bankrupt Businesses

As a business student in college, Jennifer Broughton is learning her lessons don’t stop in the classroom.

Her latest test came from a $2,400 extended car warranty she bought for her Honda Accord in 2009.

Last year, she tried to use it.

“I took my car in for repair,” said Jennifer. “I had the transmission redone.”

She says the warranty company, US Fidelis, approved the work.

“I kept calling the insurance company back and they told me that the money was on the way,” said Jennifer.

The money never came. US Fidelis filed for bankruptcy. And Jennifer was stuck with the $2,100 repair bill.

Bankruptcy Attorney Randy Skinner of Greenville says once a company goes under, you need to file a claim by the given deadline.

“If you have a claim against the company, you’re entitled to get some type of payment. It doesn't mean you’re going to get it but you need to let the court know what you believe you’re entitled to,” said Skinner.

In 2013, 33,061 businesses in the U.S. filed for bankruptcy. In South Carolina, there were 232 business filings.

Skinner says those numbers are lower than in years past.

But if you do get caught in one, prepare to wait.

“In a Chapter 7 case, you file your proof of claim and a trustee has to then find the assets, sell them, go through claims, review them,” said Skinner. “It’s going to be a year before you get any payment toward your claim. And do not expect your claim to be paid back in full.”

And review your contract to see what the company’s obligation is to you.

Jennifer is still fighting for her fair share. She missed the claim deadline for US Fidelis. She’s now working with the Attorney General’s office in Missouri where that company was based to try and get some of her money back.

If this happens to you, get the bankruptcy case number from the company and read through the filing to understand your options and deadlines.

If you can’t get a hold of the company, try the Public Access to Court Electronic Records, or PACER. You can also try the U.S. Bankruptcy Courts website for out of state businesses or the Court’s District of South Carolina for in-state businesses.

Skinner says to avoid having to deal with a bankrupt business in the first place, do your homework.

“Anytime you deal with a company, do your own credit check because they’re going to do a credit check on you most likely. Do your own, go online and find out what people’s experiences are with them. And if they’re overwhelmingly negative and if they’re not fulfilling their obligation to the customers, you might want to go somewhere else,” said Skinner.

He says if you hear about a company possibly closing that you’re doing business with, don’t ignore it.

“Typically you’re going to hear rumors. You’re going to hear rumors from other customers, other consumers that have dealings with the company. Go online, go on websites and kind of verify them, vet them out a little bit,” said Skinner.

By Tracey Early: Co-anchors the 5:30 and 7 p.m. newscasts and is a general assignment reporter at wspa.com