A recovery triage guide when the Chinese counterparty has stopped operating or appears judgment-proof.

This guide provides general legal information for foreign companies and overseas buyers. The practical route depends on the contract, evidence, Chinese counterparty identity, assets, forum, claim amount, and deadlines.

Verify the legal status, not just the website

A silent website, empty office, disabled marketplace store, or unanswered telephone does not by itself establish dissolution or insolvency. Obtain current Chinese registration information and distinguish between active, abnormal-operation, revoked, deregistered, liquidation, bankruptcy, and enforcement status. Also verify whether the contracting entity is the same company that operated the factory or received payment.

Trace the transaction and related actors carefully

Map the contract, company chop, signatory, bank recipient, invoice issuer, factory, exporter, freight documents, marketplace profile, shareholders, legal representative, and refund promises. Liability does not automatically transfer to a shareholder, director, sister company, or new business. However, false representations, improper liquidation, payment receipt, asset transfers, or other specific conduct may justify additional analysis.

Assess commercial value before filing

Check available assets, enforcement history, pending cases, equity interests, intellectual property, receivables, machinery, inventory, and whether a liquidation or bankruptcy claim route exists. Compare the likely recoverable value with legal fees, court or arbitration costs, translation, security, travel, and time. A legally strong claim may still be commercially unattractive if there is no realistic collection path.

Act before evidence and assets disappear

Preserve all identity and transaction evidence, obtain current records, document the supplier's closure statements, identify alternative addresses and assets, and avoid alerting the wrong party before preservation strategy is considered. Where a settlement is possible, require clear payment dates, default consequences, correct legal signatures or chops, and security that can be verified.

Frequently asked questions

Request a focused case assessment

Send the contract or purchase order, payment proof, supplier Chinese name, business license if available, material communications, amount at stake, important deadline, and a short chronology through the LawPW contact page.

Guangdong Pingwei Law Firm is based in Shenzhen and provides legal services throughout mainland China. This page is general information, not a guarantee of recovery or matter-specific legal advice.