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legalg, Attorney
Category: Business Law
Satisfied Customers: 10484
Experience:  General Practitioner. Research Attorney
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I have a cabbage loan that I will not be able to make one of

Customer Question

I have a cabbage loan that I will not be able to make one of the monthly payments my business is seasonal and outside so in the cold it is very challenging
JA: What state are you in? And have you consulted a local attorney?
Customer: florida no
JA: Has anything been officially filed? If so, what?
Customer: no the due date is 12 December I have not missed any others and will be able to make Jan.
JA: Anything else you want the lawyer to know before I connect you?
Customer: no
Submitted: 11 months ago.
Category: Business Law
Expert:  legalg replied 11 months ago.

Hello! I will be reviewing your question and posting a response momentarily; if you have any follow up questions please respond here. Thanks!

Expert:  legalg replied 11 months ago.

I am sorry to hear this; presumably this is an unsecured loan, which means that the lender can only attempt to recover money by declaring the loan to be in default, and suing the business (you mentioned it is a business loan). Unless the owner personally guaranteed the loan, or the business is a sole proprietorship (as opposed to an LLC or other corporation), only the business is liable for the debt. This means the lender would need to sue the business, not the individual.

Generally however, most lenders will work with a business when there will be an anticipated issue of temporary nonpayment. The lender wants to get paid, so if it appears to be temporary they will generally allow it, not declaring a default, and rather work out a payment plan for the missed payment. In Florida, there is an exemption on interest rate maximums for commercial loans over $5,000; so the interest and late fees may be high; it is possible to request that if the loan terms provide for daily late fees, if that can be waived during the repayment period for the one month obligation.

Any agreement needs to be in writing so that they cannot later claim default and sue on the loan.

Bankruptcy is generally only an option when one anticipates a long term situation.

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Information provided is for educational purposes only. Consultation with a personal attorney is always recommended so your particular facts may be considered. Thank you and take care.

Expert:  legalg replied 10 months ago.

Hello again; just checking in to see how things worked out;
if you have further questions please don't hesitate to reach out to me here on Just Answer.