Question re: loan defaults...

[krc4969]

What is the name of your state? COLORADO

Our business was purchased from a previous owner, signed contract etc. The contract states we are to pay a certain amount towards the loan to the previous owner each month. We have NOT been able to meet this exact amount each month, but the old owner has accepted ALL payments regardless of amount, and has never sent out a letter saying that we are in default up to this point. The business closed recently due to no more money basically, and the old owner, pursuant to the contract, is taking back all the business assets, including a significant amout of uncollected receivables. We got a letter saying that we are NOW in default of the loan as of July 7th, 2006, yet he asked for and accepted a $1000 check from us on July 8th. If he is still accepting money from us, can we technically be in default?

Thanks...

Kristin

 

[divgradcurl]

What is the name of your state? COLORADO

Our business was purchased from a previous owner, signed contract etc. The contract states we are to pay a certain amount towards the loan to the previous owner each month. We have NOT been able to meet this exact amount each month, but the old owner has accepted ALL payments regardless of amount, and has never sent out a letter saying that we are in default up to this point. The business closed recently due to no more money basically, and the old owner, pursuant to the contract, is taking back all the business assets, including a significant amout of uncollected receivables. We got a letter saying that we are NOW in default of the loan as of July 7th, 2006, yet he asked for and accepted a $1000 check from us on July 8th. If he is still accepting money from us, can we technically be in default?

Thanks...

Kristin

If you owe a contractual amount of money each month, the fact that the seller was accepting less than that amount each month and NOT taking action does NOT mean that you are not in default. Default does not mean that the seller has to take action, only that he may take action. Of course, if this is 20 years later, maybe that would be a different story, but if you are currently in default, yes, he can take action.