Ask a Lawyer - Archive

I sold a small business and took a note on part of the sale. They incorporated the business but the sale was a personal guarantee. They paid 2 years and then left the building, which was leased, took some of the equipment and supposenly selling some to the new tenant. They still owe me about $34,000.00. What are my chances of collecting or can I only file a lein. Is it worth it to pay an attorney to pursue.

Thanks

Well, the good news is that you got a personal guarantee from the buyers. As you recognize, though, the question of whether or not you are going to get paid on the promissory note is a different story. At a minimum, this is certainly something to talk to a collection attorney about.

You may only push the buyers into bankruptcy, but even this may not be bad if you are a secured creditor by reason of still having a security interest in the business assets. Furthermore, if they have been making preference payments (e.g., to friends and family) rather than paying you, a bankruptcy court just might make these folks pay back the money into the bankruptcy estate. You would also have to file an action and get a judgment in order to get the type of lien I think you are talking about.

In the alternative, you might also talk to a collection agency. They might take your account and try to collect on it on a contingency basis (e.g., they take a percentage of whatever they may collect). Good luck.