If someone sold their business, can they still collect a debt from you a year later?
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If someone sold their business, can they still collect a debt from you a year later?
Used services at a business know that there was a balance due and that they have three years to collect but is it still legal for them to collect after they no longer own that business?
Asked on August 7, 2012 under Business Law, Louisiana
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
Either the former owner or the business (and its new owner) can collect from you, but not both. Which one has the right to collect depends on how the business was sold and what was sold. For example, if the business was not a corpation or an LLC, but was a sole proprietorhip, the former owner would normally still be the one to collect on an old debt unless he sold the accounts receivable. Even if the business was an LLC or corporation, so it would normally be the business, not the former owner, who can collect, the sale might have specifically let the former owner keep the accounts receivable.
You can and should ask for the former owner to show proof that he has the right to this debt. You can contact the business to confirm this. And if you choose to pay, you may wish to only do so if he will sign an agreement under which he agrees to indemnify you against anyone else claiming the right to collect this debt.
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