It’s all so sad. You lost a valued customer when the owners filed for bankruptcy. If there’s a plus side, you were paid some of what you were owed before the company crashed. But now, years later, you’re told you have to pay back every cent, so all the creditors get a fair shake. How can that be?

My latest Legal Edge article in SmartCEO is called “Beware the Claw-backs.” In it, I explain how you could be on the hook to return all the money paid by a client anywhere from 90 days to one year before they filed for bankruptcy. Claw-backs as they’re called, make sure creditors receive their fair share of the assets. While you may have done nothing wrong, if a trustee deems you received money out of turn or "preferentially," you must give it back to make sure the debt is satisfied.

The article is especially timely given the rough economy.  To help you minimize the risk of a claw-back, I offer some key pointers because, quite frankly, no one wants to be penalized if someone else declared bankruptcy. You can read the entire article by clicking here.