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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 115464
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I sold a small business and carried a significant portion of

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I sold a small business and carried a significant portion of the purchase price as a loan. The buyers are at least 5 months behind in their payments. Our purchase contract specified that if the buyers became delinquent in their payments, I had the right to foreclose (repossess) the business and all of it's assets. If I choose to foreclose, am I obligated to return any of the buyer's down payment or on-going monthly payments?
No, if the buyer is in breach of the contract and is delinquent, in addition to them losing the business to your foreclosure, they forfeit any payments they made to you. Just like foreclosing on a house, when you lose your house to the bank you do not get anything you paid the bank on the mortgage back.

You need to send them a letter notice you intend to foreclose pursuant to the contract and then you would file the foreclosure action and take the assets and the business back.


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Customer: replied 4 years ago.
Can you please point me to the Arizona statutes/laws that pertain specifically to foreclosing/repossessing a small business? I am happy to do research.
It is a breach of contract claim, the AZ foreclosure statutes are AZ 33-721 et seq. There are no specific statutes just about a small business.
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