What to do about collecting a debt from the sale of my business?

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What to do about collecting a debt from the sale of my business?

It is for a 3 year term and the buyer has only made 2 payments in last 10 months. He will not return any calls, letters, etc. The promissory note and purchase agreement are in place and the buyer is incorporated. The total sale amount was 80k, includimg assets. From what I hear his business is demenishing and his assets are being repossessed.

Asked on September 3, 2013 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Legally, if he is violating the terms of the agreement of sale, you could sue him for breach of contract and to receive the money due you. Practically, you may have no recourse: you "can't get blood from a stone," so if the buyer is insolvent and has little or not money or assets, it doesn't matter if you sue and win--there is  nothing to collect. And if the buyer is a corporation, you cannot sue the corporation's owners, only the corporation itself...and if the business "is diminishing and [its] assets are being repossessed," you're in the situation of not being able to collect anything.


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