Business Debt

[interactive]

What is the name of your state?
Ariz

The situation?
So I have a former employer that I previously did business with. Our relationship broke down, and I terminated my contract with them because of what I deem ill-will on their part. Now they have a collections attorney that they work with that has contacted me. We had a single phone conversation to which I stated I would refuse to converse over the phone, and that they needed to contact me in writting, which they did. We had a few letters go back in fourth. I moved away, received one additional letter which basically contained a copy of the original contract, and that's it.

The contract itself doesn't appear to have any personal guaranty and I signed it under the name of my business (as in I put my name, my signature, and the name of my business) - yet they continue to address the issue directly against me and not even a mention of the business. The terms of the contract stated that upon termination, I, the customer, owe the balance of the contract (to the sum of roughly $20k). They're claiming that I owe a sum of $40k, yet literally there's no proof anywhere on paper that I owe that amount (only the balance of the contract, which again is $20k). When I requested in writing a break down of this amount, I was sent a copy of the original contract, and a copy of an additional contract that I had with another party involved in the situation (which they are *not* representing, or even appearing to represent), and that's roughly how they managed to come up with that number, though this is the first time that the second contract is mentioned.

Now, this all started earlier this year (we'll say 6 months ago). I was searching for something unrelated today and noticed a listing online of a civil lawsuit from this company/their collections attorney and mine dated about two months back. I tried searching online for the case number mentioned (searched all courts in the area where this was involved) and found nothing. I've yet to be summonsed (that I'm aware of), and yet to receive any additional letters.

There is a possibility that they summonsed an old address as I've moved since this issue erupted (however they have my postal, po box address), but I've yet to receive it.

As for the debt, I feel I do not owe it personally or through my business, or not at least the sum they are demanding. I'm prepared to hire counsel if need be, but, my question is, if the case has already been pushed through the courts, what actions can they take against me? This is a "business debt" that they may be labeling as personal, can they touch my personal deposit accounts? I'd be prepared to file bankruptcy for the business if a judgement has been made, so long as it is against the business, would this alleviate any liability against me personal?

Hopefully I didn't ramble too much and included enough information, any input or suggestions is much appreciated.

 

[seniorjudge]

Boiled down to the grits of the thing, your question is you are being sued for a debt and you want to know if it will go against your business or against you personally.

No one knows.

You need a lawyer yesterday.

 

[interactive]

Boiled down to the grits of the thing, your question is you are being sued for a debt and you want to know if it will go against your business or against you personally.

No one knows.

You need a lawyer yesterday.

I appreciate the post and apologize for beating around the bush, if I did. The reality of the situation is such that I don't actually know if I'm being sued, however, I saw on a local newspaper a list of "civil lawsuits" and my name, including my businesses name were listed - however I've searched through and through and cannot find any additional information on the case.

I obviously am not trying to have people on this forum infer whether they're suing me personally or my business - so I apologize. However, I should identify my questions:
1) On a contract between two businesses, does a personal guaranty literally have to be stated for one to exist? Am I personally liable for a business debt, that I signed for, but see no mention of me personally being liable for the contract if it defaults?

2) How long does it take for them to get a default judgement since I've never been summonsed? The case is listed roughly 2 months ago in the newspaper if that gives a point of reference.

3) For a issue like this, is there a particular "type" of attorney I should seek? What's the retainer generally for these instances?

 

[JETX]

The contract itself doesn't appear to have any personal guaranty and I signed it under the name of my business (as in I put my name, my signature, and the name of my business) - yet they continue to address the issue directly against me and not even a mention of the business.

Did your signature include your corporation title?? If not, then there is a good chance (depending on the FULL facts) that you could be found PERSONALLY liable.

As for the debt, I feel I do not owe it personally or through my business, or not at least the sum they are demanding.

Of course, what you 'feel' is not relevant.

 

[interactive]

Did your signature include your corporation title?? If not, then there is a good chance (depending on the FULL facts) that you could be found PERSONALLY liable.

Yes, it's literally:
My Name
My Company/Entity
Date

Of course, what you 'feel' is not relevant.

I don't doubt that, however I was simply mentioning that to alleviate the question. Thanks for your post though.

 

[TXPI]

I believe your personal liability depends on the structure of your business. Was it a sole proprietorship, partnership, corporation, or LLC? The first two instances leave you personally liable, while the latter two do not.

 

[interactive]

I believe your personal liability depends on the structure of your business. Was it a sole proprietorship, partnership, corporation, or LLC? The first two instances leave you personally liable, while the latter two do not.

The entity is an LLC, so I would assume the shield would cover that?

On a different note, I think the best thing for me to do is seek professional advice. What is the best way to solicit an attorney that would have relavent advice for this? Do I just dig up the phone book, and call around, explaining the situation? What should I expect to do, just pay for a brief consultation?

 

[TigerD]

Contact the local bar association and yes, expect to pay something for your consult.

Not to be a jerk, but, why don't you already have an attorney for your business?

DC

 

[TXPI]

Here's the address for the AZ State Bar find-a-lawyer page: http://www.azbar.org/LegalResources/findlawyer.cfm

 

[interactive]

Here's the address for the AZ State Bar find-a-lawyer page: http://www.azbar.org/LegalResources/findlawyer.cfm

Thank you, much appreciated.

 

[interactive]

Contact the local bar association and yes, expect to pay something for your consult.

Okay - that's no issue, I was just making sure I was going about it the correct way.

Not to be a jerk, but, why don't you already have an attorney for your business?

DC

That's a legitimate question, like a lot of businesses I started it on basically a shoe-string budget. I'm a college kid, and at the time, money was tight. I formed the business my self, because I couldn't afford an attorney at the time. I'm finally at the point where professional advice is affordable and make sense (well you know, it always makes sense right), I've just yet to seek it on this level because well, no one wants to hire a lawyer unless they need one - at this point it obviously is a need.

Anyways, thanks all for your input - it is much appreciated.

 

[JETX]

Yes, it's literally:
My Name
My Company/Entity
Date

You're toast.

Your attorney should have told you to ALWAYS sign company documents as follows:

ABC Company
John Smith, President
Date

You want to make sure that the contract is between the other party and your company..... NOT you personally.