Bankruptcy monitoring for staffing agencies
Know before you fund the next payroll for a bankrupt client.
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You still owe workers – even when the client can't pay you
Staffing agencies are in a uniquely exposed position: you front payroll weekly, then collect from clients on 30–60 day terms. When a client files Chapter 7, the automatic stay prevents them from paying the current or next invoice – but your payroll obligation to placed workers doesn't stop.
Every week of continued placement on an insolvent account increases your unsecured claim and your unrecovered payroll exposure. The window to stop is narrow – and you only get it if you find out fast.
How CaseWarn helps
Alert before the next weekly payroll cycle
CaseWarn detects filings daily. A client who files on Monday is in your inbox Tuesday morning – before the Wednesday payroll run for their workers.
Stop placements before exposure compounds
With an early alert, you can pull placed workers off the account and stop new placements before adding more unrecovered payroll liability.
Monitor your full client portfolio automatically
Most staffing agencies have 20–200 active client accounts. Add them all to CaseWarn once and monitor every one continuously.
Real scenario
A staffing agency has 14 contractors placed at a logistics client billed at $210,000/month. The client files Chapter 7 on a Thursday. Friday morning, the CaseWarn alert arrives before the Monday placement call. The agency recalls all 14 contractors over the weekend, cancels the Monday placements, and files a proof of claim for three outstanding invoices. Exposure limited to $70,000 instead of the $140,000 it would have been after another two payroll cycles.
What you get with CaseWarn
- Stop funding payroll for an insolvent client before the next weekly cycle
- Pull placed workers before your liability compounds further
- File a proof of claim for outstanding invoices before the bar date
- Monitor every active client account with no ongoing manual effort
Plans from $9/mo
One company is always free – no credit card required.
How it works
Add your customers
Upload a CSV or add names one by one. No EINs or SSNs required.
We monitor daily
CaseWarn checks every US federal bankruptcy court every morning.
You get an email
Match found? We email you: name, chapter, court, case number.
Frequently asked questions
Do I have to pay placed workers even if the client can't pay me?
Yes. Your payroll obligation to placed workers is separate from the client's obligation to you. Workers have earned their wages regardless of the client's insolvency. Every week of continued placement on an insolvent account increases your unsecured claim and unrecovered payroll exposure.
Can I pull all placed workers immediately after a bankruptcy filing?
Yes. Once a Chapter 7 filing is confirmed, immediately recall placed workers and cancel planned placements. For Chapter 11 (reorganization), the client may want placements to continue – but require court-approved payment arrangements before committing more workers. An early alert lets you make coordinated decisions before the Monday placement call.
What's the difference between Chapter 7 and Chapter 11 for staffing agencies?
Chapter 7 means the client is liquidating – pull workers immediately, stop new placements, file a proof of claim for outstanding invoices. Chapter 11 means reorganization – the client intends to keep operating and may want placements to continue under court supervision. CaseWarn labels every alert with the chapter so you can respond appropriately.
Can I recover unpaid invoices from a bankrupt client?
Pre-petition invoices become unsecured claims. You must file a proof of claim by the bar date (typically 70–90 days from filing) to participate in any distribution. Recovery rates vary widely – Chapter 7 estates often pay little, while Chapter 11 reorganization plans sometimes pay a negotiated percentage. Early notice gives you time to file a complete, well-documented claim.
See also
Stop exposure before the next payroll
Monitor every active client account. One company is always free.
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