How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Ely Your Own Question

Ely
Ely, Counselor at Law
Category: Legal
Satisfied Customers: 86376
Experience:  Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
Type Your Legal Question Here...
Ely is online now
A new question is answered every 9 seconds

Hi, Im in Texas. I sold my business in 2008 for cash and

Resolved Question:

Hi,
I'm in Texas. I sold my business in 2008 for cash and note. After note payments stopped for a long period of time, we ultimately reached a settlement. The new note is now in default. Efforts to receive payments have mostly been ignored. The note is subordinate to a senior creditor, but it is secured by a personal guaranty. What are my remedies to collect?
Submitted: 11 months ago.
Category: Legal
Expert:  Ely replied 11 months ago.
Hello friend. My name is XXXXX XXXXX welcome to JustAnswer. Please note: (1) this is general information only, not legal advice, and, (2) there may be a slight delay between your follow ups and my replies.

I am very sorry for your situation. At this point, you have not filed suit yet, correct? Also, how much is still owed to you?

This is not an answer, but an Information Request. I need this information to answer your question. Please reply, so I can answer your question. Thank you in advance.
Customer: replied 11 months ago.

I filed a suit in the first matter when payments were not made. We reached a settlement in 2011 and this "new note" was part of that settlement. I have not filed suit for this current matter. Over $55,000 plus interest and collection costs is owed.

Expert:  Ely replied 11 months ago.
Thank you, J. Just two more questions, please:

1) Is the original debt owed by the business, or the individual, per the agreement?
2) Is the business incorporated?
Customer: replied 11 months ago.

The debt is owed by the business (I believe it is an S-Corp). The guaranty is personal.

Expert:  Ely replied 11 months ago.
Thank you.

Believe it or not, I know very much what this feels like. I will not go into more details, but suffice it to say that I have been in your shoes, more or less. It is a very difficult feeling, especially because you have little control over whether or not they would actually pay you out, with a constant worry that they may simply run the business under and walk away, and it is maddening. I relay my condolences, because I know very close to what you are going though.

What are my remedies to collect?

You can sue again, although this time you may attach both the business and the guarantor. Allow me to explain.

To sue in a state court, one needs to have a "cause of action." There are numerous causes of action, such as "breach of contract," "negligence," "fraud," "unjust enrichment," etc., as well as causes of action rooted in statutory law. Every state has their own although they are very similar to each other in every state.

Here, you have come into another agreement with the business and the individual via the agreement in prior suit, which they have now violated. As such, both are liable for breach of contract.

The essential elements of a breach of contract cause of action that must be prover are:
(1) There is a valid contract;
(2) The plaintiff performed or tendered performance according to the terms of the contract;
(3) The defendant breached the contract; and
(4) The plaintiff sustained damages as a result of the breach.
Valero Marketing & Supply v. Kalama International, 51 S.W.3d 345, 351 (Tex.App.- Houston [1st Dist.] 2001, no pet.).

Now, you may not be able to get as much out of the business if there is already a UCC-1 senior creditor, but whatever you do not get out of the business, you should be able to get out of the guarantor, personally. Ergo, they stand the most to lose, and as such, you may wish to let them know that you would proceed to force satisfaction of judgment after another suit, unless the business abides by the agreement struck, catches up, and continues payment.

If they have already ignored such a request, then the next step would be to file a Plaintiff's Original Petition to pursue this in Court, against both parties.

Good luck.

Gentle Reminder: Please use the REPLY button to keep chatting, or RATE my answer when we are finished. Kindly rate my answer as one of the top three faces and then submit, as this is how I get credit for my time with you. Rating my answer the bottom two faces does not give me credit and reflects poorly on me, even if my answer is correct. I work very hard to formulate an informative and honest answer for you; please reciprocate my good faith. (You may always ask follow ups at no charge after rating.)
Customer: replied 11 months ago.

I already spent a considerable amount with the first suit. I'd like to think there may be other less expensive options. What are your thoughts about placing this with a collection agency? Any other ideas?

Expert:  Ely replied 11 months ago.
Jeff,

I am afraid that aside from a civil suit, there are few other real options. A civil suit is how parties settle contract disputes.

What are your thoughts about placing this with a collection agency? Any other ideas?

This is certainty possible, but the most that a credit agency can do is call and harass them. They cannot sue without your permission. A collection agency does nothing but threaten for payment. If they have ignored you, then there is a good chance that they would ignore a collection agency. Aside from this, there are few other options - I am sorry.

Please note: I aim to give you genuine information and not necessarily to tell you only what you wish to hear. Please, rate me on the quality of my information and do not punish me for my honesty. I understand that hearing things less than optimal is not easy, and I empathize.

Gentle Reminder: Please use the REPLY button to keep chatting, or RATE and submit your rating when we are finished.
Ely, Counselor at Law
Category: Legal
Satisfied Customers: 86376
Experience: Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
Ely and 6 other Legal Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Not only did he answer my Michigan divorce question but was also able to help me out with it, too. I have since won my legal case on this matter and thank you so much for it. Lee Michigan
 
 
 

Meet The Experts:

 
 
 
  • Tina

    Lawyer

    Satisfied Customers:

    8436
    JD, BBA Over 25 years legal and business experience.
< Last | Next >
  • http://ww2.justanswer.com/uploads/MU/multistatelaw/2011-11-27_173951_Tinaglamourshotworkglow102011.64x64.jpg Tina's Avatar

    Tina

    Lawyer

    Satisfied Customers:

    8436
    JD, BBA Over 25 years legal and business experience.
  • http://ww2.justanswer.com/uploads/RA/ratioscripta/2012-6-13_2955_foto3.64x64.jpg Ely's Avatar

    Ely

    Counselor at Law

    Satisfied Customers:

    19941
    Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    8189
    25 years of experience helping people like you.
  • http://ww2.justanswer.com/uploads/jespoag/2008-12-17_222355_jessepic.jpg JPEsq's Avatar

    JPEsq

    Attorney

    Satisfied Customers:

    2132
    Experience as general attorney, in house counsel, SSDI, Family Law attorney, and law professor
  • http://ww2.justanswer.com/uploads/gsenmartin/2008-04-22_214950_me1.jpg Guillermo J. Senmartin, Esq.'s Avatar

    Guillermo J. Senmartin, Esq.

    Attorney

    Satisfied Customers:

    110
    7+ years of experience handling various legal matters.
  • http://ww2.justanswer.com/uploads/PA/PaulmoJD/2013-10-10_195858_JAImage.64x64.jpg Law Educator, Esq.'s Avatar

    Law Educator, Esq.

    Attorney

    Satisfied Customers:

    31621
    JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    15975
    Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.