This depends on several things. Has your company filed for bankruptcy? Has the other company? What state governs the contract between the two companies?
If the company that owes you has filed for bankruptcy then you must file a proof of claim in their bankruptcy case. If you have filed for bankruptcy you can proceed through your attorney. If the contract specifies where actions must be brought, then that is where you will file your claim. If the contract has a governing law clause but no choice of forum, then you will have to bring the claim in a state and court that has jurisdiction.
We sell barstools to this company that sells them over the internet. Neither of us is in bamkruptcy. We have gone out of business ap 1, but still would like to collect on our a/r. They are questioning our pricing, we have sold them $500K in the past 2 years. The $7000 is important to us. We are not liquid, working for nothing, and cannot afford attorney fees to collect this.
First I would try to settle this out of court by sending them a demand letter for the money owed. If you want to proceed with an action, I would recommend that you first look at the contract to see if it has a specific state in which the action must be brought. If the contract is under your company name and the company still exists (e.g. if it is an LLC and is not disolved) or if you were a d/b/a, then you can proceed this way. If the company was an LLC and is dissolved you will not have standing to sue under the company name. You could probably file in either Michigan or Massachusetts. You can bring a claim in small claims court where you usually do not need an attorney. However, there are limits to the amount of your claim. In Michigan it is $3000 and in Massachusetts it is $7000.
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