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sberanek83, Attorney
Category: Business Law
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Experience:  Extensive experience in representing and counseling small to mid-size businesses
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A few questions regarding what has proven to be a traumatic,

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A few questions regarding what has proven to be a traumatic, stressful, totally confusing and bizarre situation, a terrifying experience that led to my business "MELTDOWN:" A few months ago, a former partner sabotaged my internet business, that was generating a high monthly recurring income. Access was removed to my systems and (electronic) books/records disappeared. All cash was drained from our operating account. The systems went offline and stopped working, it was the end of my business.

Because of the system crash, I was unable to calculate monthly payment amounts owed to my existing monthly buy/sell partners, and most of them are preparing to file lawsuits now (in different jurisdictions). Also, prior to the above mentioned sabotage attack, a -previous- business had been sued in district court on a complex IP litigation, which named me personally as a defendant in addition to my old corp. So I am currently left in what has turned out to be a nightmare scenario: No cash in my business, no operating income, problems with books and records, and several (8 or more) former partners preparing to file lawsuits against the LLC (I have no atty to defend the business entity) and me personally. (yes, they are well funded and will sue--seeking a median amount of about $15k-$25k each.) Also, at the same time, I am left on my own to defend the complex IP case that is now starting and I expect it to heat up quickly. I am at the lowest point of my entire career, no cash to hire lawyers to defend any of these cases, and facing aggressive, well funded plaintiffs (particularly the IP group) who want to bury me. Here's the specific question: As a practical matter, how does one live life, after incurring a bunch of large default judgments?

It is entirely impractical for me to mount an effective defense against any of these groups now, and even less so, at the rate which the lawsuits are coming in. It is highly likely I am going to end up with as many as eight default judgments, (range $7k-50k each) some against me, some against my current or former business entity. One of the defaults might come from the complex IP case which I don't stand a chance of defending; it could easily be as high as $1MM+, the plaintiffs are ridiculously aggressive and particularly delighted seeing me unable to defend myself, so I would not be surprised if they are able to set their default judgment as high as $10MM or maybe more.

I know how important it is to try to avoid the defaults. I drove myself insane trying to find a way to fund even a modest defense against any of the plaintiffs who are moving so fast and aggressive. It simply can't be done at this time. So now I've turned to what follows; asking, as a practical matter, how does one live life, after going through a overnight business meltdown leading to a litigation storm that left a group of large default judgments? Are you constantly called to debtor's exams in different states? Do the plaintiffs try to use tricks from the debtors exams to get you in contempt and keep you in jail? For example, I read that plaintiffs are first getting their judgment, then finding a way to get an actual court ORDER that the judgment is to be paid, and then keeping the debtor in jail until the entire amount is satisfied (debtor's prison), because as long as the entire amount hasn't been paid, the plaintiff makes an argument that the debtor is in contempt.

It is a very difficult time, to say the least. Traumatic. Most attorneys address situations of a single default judgment, which would be easier to deal with. So far, I have not been able to find a lawyer who would address the possibility of having any kind of life after getting buried in a group of default judgments. What if the total amount I owe in judgments is $10MM , and 10 other smaller judgments in the amount of $7k-$50k each, all over the USA in different jurisdictions? What is life like in that case, and most importantly, can one even have a life? Thank you so much for considering an answer to this question, this is my life, I don't know what to do--no one I have met so far seems capable of anticipating the scenario where the defaults DO issue, budget is not available within time to appeal, and life simply goes on. How does one live life, and what is that life like, with multiple default judgments?

sberanek83 :

Wow! I am truly sorry to hear of your situation. I will do what I can to offer some direction and guidance. First, though, I have a couple of questions --




sberanek83 :

Do you have any source of income other than the business that just went under?



no , other than cash i may be able to borrow from friends and family.

sberanek83 :

Do you have any significant assets, such as house, car, investments?




sberanek83 :

Since you do not seem to have any assets, how certain are you that the other owners will sue you because all they really will end up with is an uncollectible judgment?



they are all filing suits. they think i have assets as i have been known as a significant partner in the past. also, the parties behind the complex ip case are relentless and simply want to cause as much pain as possible.

sberanek83 :

What about the partner who stole everything and destroyed the business? Do you know where he is? Does he have assets? Do you think you can prove he did those things?



it would be almost impossible to prove. he has funding and i do not. would be difficult to litigate with him given the incoming lawsuits. that is why i am resigned to knowing what life will be like with all of these default judgments in place.


i have looked everywhere but can't find info regarding others who have gone through such a quick meltdown scenario where they were unable to defend several lawsuits at the same time, and left with default judgments. its difficult info to find, nobody seems to know what life is like at that stage.


never got a complete answer..

sberanek83 and other Business Law Specialists are ready to help you

Here is what guidance I can offer:

First, do not despair. Many successful people have come back from seemingly impossible problems.

There are three possible options of which I can conceive without knowing all the details of your situation.

1. See if you can find an attorney to go after your partner on a contingency fee basis.

2. In exchange for releases, offer to assign your claim against your partner and pledge your cooperation to the other owners. If what they really care about is getting their money and not punishing you, then going after the other partner is a better option for them. This doesn't help with the IP case, however.

3. File bankruptcy sooner rather than later. In all reality, this may be your only real option because it will stop all lawsuits against you and wipe out any liability you may have.

Customer: replied 4 years ago.
Can you explain what life would be like, living with the multiple default judgments, no bank accounts or car, some very large (one possibly $1MM-$10MM), getting called to debtors exams in different cities, arrest warrants issued if i don't show, sherriffs property seizures at my address, etc.
While I don't have a crystal ball, obviously it would be very difficult. The point is to prevent that from happening. Thus, if you can work a deal with some of the people or file bankruptcy, you will prevent the judgments and all the collection activity that would go with them. People come back all the time from bankruptcy, but it will be less helpful to you if you wait until you get all of the judgments and then file.
Customer: replied 4 years ago.

This is a IMPORTANT follow up to a question I recently asked, pertaining to the complete meltdown of my internet business, and the multiple (8-15) lawsuits quickly turning into default judgments that I am now incurring. Filing BK is not an option for me.

I am being sued by a group of aggressive plaintiffs who recently noticed I can't defend against their lawsuits. They are a unethical, well funded group who will do "anything" (or at least write anything into a lawsuit) with the intent to harass defendants and collect money in the form of settlements.

question is -- when and if they determine where my source of income is now, i.e., friends and/or family, and in particular, if I move my residence to live with friends/family, is it likely they will start finding subtle ways to join my friends/family to their lawsuits, or even start new lawsuits against them, requesting discovery, etc., as a way to apply pressure and simply get paid? A law student friend mentioned that "anyone can sue anyone at any time, for any reason," "and require the defendant to spend money hiring a lawyer for defense," I understand. Is it that simple? Can the plaintiffs simply make a vague allegation, i.e., some kind of civil conspiracy between me and the friends/family, to start joining my wealthy friends (much better target than me at this point) to their lawsuits? Or should I feel comfortable knowing that aggressive plaintiffs simply wouldn't do such a thing? I've already seen this group manufacture vague arguments to sue others without much reason and simply start applying pressure in court. The plaintiffs behind the cases I am facing are unethical liars, and very aggressive.


Optional Information:
State/Country relating to question: New Jersey

Already Tried:
spoke to local attorney. he said he wasn't sure if the many plaintiffs who are aggressively trying sue me would eventually try to pressure a settlement payment out of my friends or family by joining them as parties to existing litigation, or even by filing a new lawsuit against my friends and family. also i have been looking at how my friends and family might be required to participate at debtors exams, if the judgment holder alleges that person "might" have information about my assets.


Urgency: HIGH