What are the implications if I breach a contract with a coach/service based company?
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What are the implications if I breach a contract with a coach/service based company?
I paid a $2500 non-refundable deposit for a coaching program. I ran into
financial hardship and am enrolled in a debt repayment program and have no access to credit and barely have enough income to cover monthly expenses. I asked to be released from the contract before the program officially started but she said that I must oblige the contract and pay a buyout of 3 months $1500 per month for $4500 total. I don’t have the money so am wondering what legal action they can take if I don’t follow through, which is breaking the contract I signed. If they took me to small claims court, what assets of mine would be vulnerable? I don’t really have any assets.
Asked on October 31, 2018 under Business Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
Their recourse would be to sue you. If you don't pay after they sue and win (and they will win; your finanical hardship is NOT legal grounds to not pay) they could potentially garnish (take a percentage of) your income or wages, though if your income or wages is sufficiently low, especially as compared to your necessary expenses, they may be denied garnishment (or only get a very small dollar amount per paycheck). They could try to execute on, or take, any money you have in the bank. If you own real estate, a lien could be put on it; theoretically, certain valuable non-real estate (i.e. "personal") property, like a vehicle (generally not your only one), including ATV, boat, camper, etc. or a large-screen TV or any artwork or jewlery, etc. could be taken, but generally isn't--it can be alot of work to pursue those items.
The judgment against you will last for years: if you later are in a better situation financially, they could come after you for the money then.
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