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Law Pro
Law Pro, Attorney
Category: Business Law
Satisfied Customers: 24870
Experience:  20 years experience in business law - sole proprietor, partnership, and corporations
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I have a LLC based in Florida which has done some work for

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I have a LLC based in Florida which has done some work for another LLC based in North Carolina, I have invoiced $52k and I have another $75k to invoice. The other company have not disputed the invoices that have been raised but have said that they can't pay the invoices at the moment and they don't know when they can pay. They have acknowledged the debt in emails and verbally. I don't believe them, what steps can I take to recover the debt ?

I would like to issues something like a statutory demand that would instigate winding up procedure should they not pay. What can I do

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Do you have a written contract with them?

If so, is there anything in that contract about where jurisdiction would be and what laws would apply if there is a dispute?
Customer: replied 4 years ago.

Hi Fred,


 


I believe that the jurisdiction is North Carolina

Then that means you have to sue them for breach of contract where their business is.

That means travel back and forth to NC.


For future reference - you should change your terms of service, invoices, and contracts to state NC is where jurisdiction is and NC laws apply. Then you can sue them in your "backyard" instead of their backyard - they have to come to you instead of you going to them.

Regardless,

You stated and asked:


I have a LLC based in Florida which has done some work for another LLC based in North Carolina, I have invoiced $52k and I have another $75k to invoice. The other company have not disputed the invoices that have been raised but have said that they can't pay the invoices at the moment and they don't know when they can pay. They have acknowledged the debt in emails and verbally. I don't believe them, what steps can I take to recover the debt ?

 

 

You can ask that before you send the products they sign a confession of judgment - which allows you to immediately get a judgment without going through protracted and expensive litigation.

In NC, a judgment by confession may be entered without action at any time in accordance with the procedure prescribed under G.C. §1A-1, R.68.1 if such judgment is for money due or for money that may become due or for alimony or child support. A prospective defendant may file with the clerk of the superior court a statement containing the name of the prospective plaintiff, his county of residence, the name of the defendant, his county of residence, and a concise statement showing why he is or may become liable to the plaintiff. A judgment by confession, upon entry, may have the same effect as other judgments except that no judgment by confession may be held as res judicata to any fact in any civil action except in the action on the judgment confessed.

 

 

Then if you did have to pursue them - you would already have a judgment.

 

 

You could also ask that the owners of the LLC accept personal liability for the debt - that would mean that regardless if the LLC when bankrupt - you could still pursue them.

 

You could ask that the owners of the LLC personally execute a confession of judgment too. That would allow you to go after them personally regardless of what happens to the LLC.

 

 

I would like to issues something like a statutory demand that would instigate winding up procedure should they not pay. What can I do

 


That's really not an option that you can force the dissolution and winding up of the LLC.

You could force them into bankruptcy but that's not the best option for you potentially. If a creditor forces a debtor into bankruptcy, they may not necessarily recoup their debt investment (get paid for their services or products). The bankruptcy trustee (appointed by the courts) will allocate the debtor's liquidated estate to creditors based on a preordained hierarchy outlined by the law. Thus, the creditor who forces the debtor into bankruptcy may not necessarily recoup -- indeed, the creditor may help other higher priority creditors get their funds without being remunerated.

So I wouldn't go that route myself.





I would try to get them to sign a confession of judgment OR be first in line to file suit, get a judgment, and execute asap on the judgment before other creditors file suit.


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Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer. If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service with 3, 4, or 5 faces so I can receive credit for helping you today. I thank you in advance for taking the time to provide me a positive rating!

If you have any questions, about this or anything else, please ask for me, Law Pro, directly in the question and I will try to assist you as best I can.

For example, you would state, "This question is for Law Pro . . . (then on with your question).
Customer: replied 4 years ago.
Dear Law Pro, Apologies, I am travelling and so it has been difficult to get to the Internet. Thank you for your answer, I will follow up with a question shortly, I will rate you very good
Thank you!

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