Consumer Law

Warranty Claims and a Bankrupt Company

By M. Stan Herring

Bankruptcy Law Network has posted an article that discusses if a company going bankrupt is obligated to honor a warranty. It depends on the type of bankruptcy that was filed for.

If it was Chapter 11, there's more of a chance that the company will honor your warranty that was purchased prior to filing for bankruptcy. One main reason is to maintain a positive business image.

If the company filed Chapter 7 then they aren't obligated to honor a warranty, but might do so anyway to keep the same "goodwill" image.

Otherwise, you?re out of luck. This wasn?t a rip-off, 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.

If you have questions regarding bankruptcy, feel free to contact us.

Full post as published by Alabama Consumer Blog on August 31, 2009 (boomark / email).