Warranty Claims Against a Bankrupt Company

by Jed Berliner, Western & Central Massachusetts Consumer Lawyer

June 27, 2009

You may have purchased something from a company now in bankruptcy, and you have to make a warranty claim.

If the company is in Chapter 11, it will very likely honor your claim for the good will it generates (you’ll tell your friends that it’s okay to do business with the company) even though the company may not have to, because your warranty contract existed before the bankruptcy was filed.

If the company is in Chapter 7, the buyer of the bankrupt company’s assets might honor your warranty claim for the same good will reason, even though it doesn’t have to.

Otherwise, you’re out of luck. This wasn’t a ripoff, this was just the bad luck of doing business with a company that didn’t make it. You’ve lost your warranty. The owners lost a significant asset, and the workers lost their jobs.

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Jed Berliner practices exclusively in consumer bankruptcy, foreclosure defense, and related consumer protection litigation such as credit card defenses and suing debt collectors. He established his Springfield, MA practice in 1988. Attorney Berliner is a regular and active contributor to the Bankruptcy Law Network, the Bankruptcy Roundtable, and the National Association of Consumer Bankruptcy Attorneys, three specialized consumer bankruptcy forums on the Internet, and is an informal mentor to regional practitioners. He is recognized by his peers as an expert in consumer bankruptcy issues. He thoroughly enjoys being rated "excellent" in his client surveys.

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Last modified: February 9, 2013