THE AGENCY FILED BANKRUPTCY  - NOW WHAT?
 
I'm uncertain how many professional models have actually faced this situation.  But Sabrina has now been thru TWO agencies filing for bankruptcy in the last 3 years.  One agency was a HUGE corporation in a major market and the other was a smaller boutique agency in a secondary market.  Both involved the loss of thousands of dollars without warning. 
 
My first reaction in writing this article was to tell you that you should scream, yell, throw things and curse out those so and so's for screwing you out of your hard-earned money!  While that makes you feel good, it doesn't really help the situation.  It really bothers me that the agencies are dealing with minors in many cases and the young teenage models end up casualties in the bankruptcy cases.  After having Sabrina go thru this two times now in two different markets, we have a little better feel of what to do now, and what we should have done in the past.
 
As soon as you hear early rumors or rumblings that your agency may be about to go belly-up, consult an attorney immediately.  They can research and see if anything has been filed.  As hard as it is to believe, your agency might not be forthcoming with this information!  Imagine that!  Your attorney can advise you on the best course of action based on what they uncover, and the amount of money owed to you or your child.  Be proactive and take steps to protect you or your child's investment.  If possible, file suit against the agency right away in small claims court in the county in which they are licensed.  You must act quickly to file suit so you can get a judgment against the agency BEFORE they file bankruptcy. 
 
If you can successfully accomplish this, then your judgment takes precedence in most states and will be handled as a separate matter.  A judgment will not be lumped with all the other models' claims, but will be treated as a completely separate issue.  If you delay and a judgment is not granted in your case prior to the bankruptcy filing date, then the amount owed to you or your child now becomes part of the main bankruptcy claim and you will have to file a Proof of Claim and be added to the main list of all other debts and miscellaneous creditors in the case.  Once this happens, in all likelihood you'll never receive a penny on the amount owed, or the case will end up in court for years eventually settling for pennies on the dollar.  It stinks because many of these agencies simply restructure, set up in business again, and start the process all over again.  In the end, it is always the models who lose in cases like this. 
 
Keep excellent records.  Be able at any time to provide accurate documentation on which bookings have been paid, and which have not, at every agency that you or your child works with.  Failure to keep accurate records of earnings is foolish and irresponsible.  Be aware that while some agencies will advance on some bookings, most do not pay until and unless they have been paid by the clients.  The agency is not going to risk paying a model if there is a chance the client won't pay.  And if the agency does advance payment and then the client doesn't pay, they will take it back from the model on her next paid booking.  Again, the model will always be the one who loses. 
 
Stay on top of unpaid bookings that are over 30, 60 and 90 days old.  Call your agency's accounting department to find out what the status of payment is, what steps are being taken to collect.  If it looks imminent that a client isn't going to pay, DO NOT work or allow your child to work for that client again until they pay all past due amounts.  Sometimes the booker isn't aware that certain bookings are still outstanding on payment and they keep sending models over until their own accounting department communicates this to them.  Yes, that's an internal issue that you shouldn't have to deal with, but it does happen and you don't want to end up the loser.  The agency loses 20% in a case like this, you or your child loses 80% so watch out for repeat bookings that are very slow pay no pay.
 
Make sure you can provide documentation to attorneys and the court if an agency does file bankruptcy.  Have all completed unpaid vouchers on hand and ready to copy for the court clerk.  Also, keep accurate record of deductions being taken out of you or your child's pay in case this issue also arises in court.  We are now involved with a case being brought against an agency because fraudulent deductions were made to Sabrina's account at an agency and deducted from her paychecks.  The agency could not provide receipts, verification of or documentation on a whole host of charges levied against her account past the date of her leaving the agency.   They simply deducted various line item charges to make more money thinking we would never question it.  This happens time and time again.