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Roger
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Category: Business Law
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I loaned $25k secured by a promissory note to a new business

Customer Question

I loaned $25k secured by a promissory note to a new business to help with start-up costs and to cover past due expenses incurred. After four months of loaning the money the business has been closed due to non-payment of rent/lease space and liquor taxes along with other vendor expenses not paid. This was set up as a sole proprietorship and the business was a bar. I am looking for info as to my course of action and how to proceed. Thank you in advance for your help.

Ken Shubert
Submitted: 4 years ago.
Category: Business Law
Expert:  Roger replied 4 years ago.
What was the collateral on the secured note?
Customer: replied 4 years ago.
There was a list of assets which inside the bar but not sure how many if any were actually owned. The only other security was by signature...friend of a friend.
Expert:  Roger replied 4 years ago.

Ok. If there is not enough collateral for you to seize and liquidate to generate enough cash to pay off the loan, your only real option is to sue on the note and obtain a judgment for the amount owed.

 

Once you get a judgment, you can try to attach any property owned by the debtor, garnish wages, bank accounts, etc. in order to collect.

Customer: replied 4 years ago.
To sue on the note would that be through small claims or what manner of suit would that be and how would I go about that process?
Expert:  Roger replied 4 years ago.

You will have to sue in County Court given the amount of money you're seeking. http://74.125.47.132/search?q=cache:ZSpifjup35EJ:www.courts.state.tx.us/+court+jurisdictions+in+texas&cd=1&hl=en&ct=clnk&gl=us

 

You can file suit on your own, but my suggestion is that you hire an attorney. It is likely that your note calls for attorneys fees to be paid if you have to sue to collect.

 

 

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