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What Happens When Your School Files for Bankruptcy

An Indiana trade school that prepared students for jobs in the medical field filed for bankruptcy just before finals this year. Students said the school shut down prior to Thanksgiving 2013 for scheduled maintenance, and then received a letter saying the school was bankrupt.
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An Indiana trade school that prepared students for jobs in the medical field filed for bankruptcy just before finals this year. Students said the school shut down prior to Thanksgiving 2013 for scheduled maintenance, and then received a letter saying the school was bankrupt.

Many students had paid for classes upfront and are left unsure how they will either finish their education or recoup their losses. The school’s bankruptcy filing listed many of the enrolled students as creditors. Some of the students hope to obtain representation and file a class-action civil suit against the school.

When a company files for bankruptcy protection, the court ranks its creditors in order of importance to decide who gets paid. Depending on the type of filing a company has made, you may or may not get paid. Chapter 11 is a debt restructuring that prolongs payment, but creditors may eventually get paid. Chapter 7 is a total liquidation, and in that case, when the money is gone, nothing else can be done unless you are willing to file a lawsuit against the debtor.

When you pay money to a business that then files for bankruptcy, you are considered an unsecured creditor. This low ranking puts you behind others already in line to be paid, such as workers of that business or banks that have extended credit to that company.

The only recourse most people will have is if they made their purchase with a credit card. Then, they can dispute the charge with their credit card company. Here are a few ways you can protect yourself from losing money in bankruptcy by a business you frequent:

  • Don’t pay upfront for goods
  • Keep any deposits small
  • Confirm delivery time before paying a deposit
  • Always pay by credit card
  • Redeem gift vouchers or store credit quickly

Please keep in mind that every case is different, so if you are thinking of filing bankruptcy, and would like to schedule a no-cost consultation, please contact us by completing the form on this website or calling us at 954-466-0541.

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If you are considering filling for bankruptcy , this would be the firm to use! Jonathan is very experienced as well as all of his team, Specially Anne ! They made the process very easy and my case was approved due to their help and expertise! I am very grateful to have had them representing me !
Xime Basa
Xime Basa
2023-09-28
I highly recommend LSS Law. No complaints. Jonathan, Ann, and Maria were very professional and clear in all our communications, which makes everything really easy.
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Donald Galindo
2023-09-05
Great service. Friendly and helpful staff. Highly recommend.
Al La
Al La
2023-03-29
Jonathan and Anne were wonderful and I thank you for helping me with my new beginning.
ADRIANNE SURRENCY
ADRIANNE SURRENCY
2023-03-29
I had a wonderful experience with Jonathan Leiderman at LSS Law. Not only is he well experienced, but he is also very patient and supportive throughout a tough time. I appreciate that he takes such a hands-on approach where there is no going through office staff and waiting for a reply. He deals with you one-on-one, and he is your single point of contact. He takes time to answer all your questions and takes the time to ensure that you understand every aspect. He is highly communicative and does so in a timely manner.... I always got a response within minutes or hours, at the latest 24 hours. I don't know how he does it all, but I am grateful that I had him to represent me! I highly recommend Jonathan and LSS Law!
Jewel Nicholson
Jewel Nicholson
2023-02-16
Jonathan Leiderman did a phenomenal job representing me and taking on my case. His knowledge, experience, and diligence quickly became apparent through his work product and the correspondence that he maintained with me. Furthermore, he was always quick to answer my questions and put my mind at ease during the entire process. Jonathan and LSS Law will forever have my gratitude and I highly recommend their services to anyone who is in need of them.
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Ali
2023-02-06
I am really greatful to attorney Jonathen Leiderman for patiently working with me through a very stressful period of ambivalence, and then towards resolution of a difficult predicament. His professionalism and empathy were exceptional. I would recomend him to all who need similar services.
Peter G
Peter G
2022-04-04
Excellent company to work with providing timely advice and guidance. Went above and beyond in assisting our company with an out of state bankruptcy issue
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2021-10-08
This company was very professional, sympathetic and very reasonably priced.
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