It’s a frustrating scenario: you’re owed money by a business, but when you go to collect, you discover the company has shut its doors or relocated out of state. Does that mean your debt is now uncollectible? Not necessarily. At Goldberg & Oriel, our experienced debt collection attorneys know how to pursue outstanding debts—even across state lines or in cases involving shuttered businesses.
Whether the business has simply moved, dissolved, or filed for bankruptcy, there are legal tools and strategies available to help creditors recover what they’re owed. Below, we break down what happens in these situations and when it’s still worth pursuing a debt.
Business Closure vs. Bankruptcy: Know the Difference
It’s important to distinguish between a business that has voluntarily closed and one that has filed for bankruptcy. When a business shuts down without going through bankruptcy court, creditors still have the right to pursue debts through traditional legal channels. These include litigation, asset seizure, and judgment enforcement. In contrast, if the business files for bankruptcy, creditors are subject to the rules and restrictions of the bankruptcy process. In some cases, debts may be discharged or partially repaid through the sale of business assets under the supervision of the court.
To explore the legal distinctions between different forms of business termination, see Cornell Law School’s Bankruptcy Overview.
The Role of Business Structure in Debt Liability
Whether or not a creditor can recover funds from a closed business often depends on how the company was structured:
Sole Proprietorships
There is no legal distinction between the business and its owner. That means any debts the business owes are also personal liabilities. Creditors can pursue personal assets such as savings, real estate, or wages to satisfy the debt.
Partnerships
In general partnerships, all partners share personal liability for business debts—even if only one partner incurred the obligation. Limited partnerships (LPs) and limited liability partnerships (LLPs) may limit liability for some partners, but general partners are typically still exposed to collection actions.
Corporations and LLCs
These entities offer limited liability, which generally protects owners’ personal assets. However, creditors can still collect from any remaining business assets—such as inventory, bank funds, or equipment. And if the business owners personally guaranteed any debts, those guarantees are enforceable.
Relocated Businesses: Does a Change of Address Change Your Rights?
When a business moves out of state or goes silent, it can become more difficult—but not impossible—to collect. At Goldberg & Oriel, we specialize in nationwide commercial debt collection and routinely handle cases in all 50 states.
We use a centralized collection approach and work with experienced legal networks nationwide to:
- Locate the debtor using skip tracing and investigative tools
- File suit in the appropriate jurisdiction
- Enforce judgments by identifying and seizing assets
- Place liens on business property when available
Moving doesn’t erase a debt. It simply means that your collection efforts may need to cross state lines—which our firm is fully equipped to handle.
Legal Tools for Recovering Debt
Even when a business closes or relocates, creditors have legal options, including:
- Filing a lawsuit to obtain a judgment
- Enforcing a lien on commercial property or bank accounts
- Garnishing income or receivables, if available
- Seizing assets through a sheriff or court officer
- Reporting defaults to credit bureaus or trade groups
If a judgment is already in place, we can often domesticate the judgment in the new state and begin enforcement proceedings there.
Is It Still Worth Pursuing?
Whether it’s worthwhile to pursue a debt depends on:
- The amount owed
- Availability of business or personal assets
- Whether the debt was personally guaranteed
- The age of the debt (based on statute of limitations)
Consult Debt Collection Attorneys Who Get Results
If you’re struggling to recover payment from a business that’s gone quiet, moved, or shut down, don’t assume the debt is gone. At Goldberg & Oriel, our experienced debt collection attorneys can assess your options and determine the most effective legal strategy for collection—whether in Massachusetts or anywhere in the U.S.
We are not a collection agency—we are a law firm with the authority to sue, secure judgments, and pursue all legal remedies. Let us help you get the money you’re owed. Contact us for a case review.