The 20-Day Window
When your US buyer files bankruptcy, you have exactly 20 days from the delivery date to file a Section 503(b)(9) administrative expense claim for goods delivered within 20 days before the bankruptcy filing. This claim gets priority over almost all other creditors and is typically paid at 100%.

Why Exporters Miss This Opportunity
1. They Don’t Know Bankruptcy Was Filed
Pakistani exporters often don’t monitor US bankruptcy filings. By the time they learn their buyer filed Chapter 11, the 20-day window has closed. We monitor filings for our clients and alert them immediately.

2. They Don’t Understand the 20-Day Rule
Even exporters who know about the bankruptcy often don’t realize the clock is ticking. The deadline isn’t 20 days from when you learned about the bankruptcy—it’s 20 days from delivery of the goods. Miss this deadline, and you become a general unsecured creditor, typically recovering pennies on the dollar.

3. They Don’t Have the Right Documentation
To file a 503(b)(9) claim, you need proof of:

Delivery within 20 days before bankruptcy
Goods received by the debtor
Goods sold in the ordinary course of business
The invoice amount
Without proper bills of lading, delivery receipts, and invoices, your claim will be challenged or denied.

4. They Think It’s Too Complicated
US bankruptcy law is complex, and the forms are intimidating. Many exporters assume they need to accept whatever the bankruptcy trustee offers. This is wrong—you have specific rights, but you must assert them properly and on time.

Real Example: Successful Section 503(b)(9) Claim
A Pakistani textile exporter recently contacted us after their US buyer filed Chapter 11. They had delivered goods just days before the bankruptcy filing. We immediately:

Verified the delivery timeline using shipping documents
Filed the 503(b)(9) claim within the deadline
Defended the claim against objections from other creditors
Recovered 100% of the amount within 6 months
Had they waited even a few more days, they would have missed the window entirely and likely recovered less than 10%.

The Preference Clawback Risk
Even if you received payment within 90 days before the bankruptcy, the trustee can sue to recover that payment as a “preference.” This is a complex area, but there are defenses available, especially for foreign creditors. Don’t ignore preference demand letters—they don’t go away.

What You Should Do
If Your Buyer Just Filed Bankruptcy:
Contact US bankruptcy counsel immediately
Gather all delivery documentation
Calculate the 20-day window
File the 503(b)(9) claim before the deadline
To Protect Yourself Going Forward:
Monitor your buyers’ financial health
Subscribe to bankruptcy filing alerts
Maintain complete delivery records
Consider credit insurance for large exposures