Small business help

[clueless]

I'm a sole proprietor of a small business. I recently got more than 90 days behind on a total of about $20,000. Monthly business with this company averaged anywhere from $3,000 to $10,000 a month. When I could only make a $5,000 payment on the 90 day amount ($8,000 was due), the company cut off my account. I've been in contact with their accounts recievable department to make payment arraingements, but they are making it hard for me to meet their demands.

I offered to continue doing business with them on a cash basis and pay them a monthly payment of $1000 - $2000 a month until the debt was clear, but they are demanding more. They have demanded that I pay the amount of $10,000 and then they will start accepting a $1000 a month payment.

What are my options here? Do I need to go beg, borrow or steal to make this lump sum payment of $10,000?

Thanks for all the help!

Clueless

 

[Malibu_Barbie]

If you don't have it, you don't have it, and that's completely understandable. Based on what you've posted, I feel that this company is being very unreasonable, and if it were me, I'd find another company to do business with, if at all possible. If that's not an option, have you spoken with a "higher up" at this company to discuss your offer as to a reasonable payment arrangement?

 

[clueless]

Thanks MB!

I do have other vendors that I'm now dealing with on a cash basis, eventhough I have open accounts with them. I'm working on a cash basis so I can get all business debts cleared and so the 90 day debt won't be a viscious continuing cycle. The company that I owe recommended that I charge to those companies so I could pay them. If I do that, then I'm only rolling the debt over to the other companies.

I was told they could sue and probably get a judgement against me, but the judge would probably set up some type of payment schedule and would be much less than I'm offering.

Is that how a judgement actually works?

Thanks again!

 

[Malibu_Barbie]

Thanks MB!

I do have other vendors that I'm now dealing with on a cash basis, eventhough I have open accounts with them. I'm working on a cash basis so I can get all business debts cleared and so the 90 day debt won't be a viscious continuing cycle. The company that I owe recommended that I charge to those companies so I could pay them. If I do that, then I'm only rolling the debt over to the other companies.

I was told they could sue and probably get a judgement against me, but the judge would probably set up some type of payment schedule and would be much less than I'm offering.

Is that how a judgement actually works?

Thanks again!

A "judgment" is entered by the Court (the Judge hearing the case) based on a bench (Judge-only) or jury trial (panel of jurors) who reach(es) a final decision on the case. Again, I feel that this company is being very unreasonable about the matter, and in the legal term, it's considered "stubbornly litigiousness". I would submit a proposed reasonable payment arrangement to settle the debt to the highest level personnel of this company (via Certified Mail - so as to preserve a defense with documented evidence), provide a reasonble timeframe to respond to your settlement offer (10 days would be reasonable), and await a response. If the company refuses the offer, then sues you, you can claim as a defense "stubborn litigiousness", and the Judge will take that into consideration as to a reduction of the total amount claimed by the company (considered a "sanction" as a result of "bad faith" in legal terms), as well as consider and order a reasonable payment plan in the event Judgment is awarded in favor of the company.

 

[Malibu_Barbie]

Oh, I forgot to mention ... the Judge could also order "payment in full" of the amount the company is claiming (with no payment arrangements - that's left to the Judge's discrection). Therefore, the company can place a lien on your property and assets to secure its award for the full amount of the Judgment. I feel that the best thing to do at this point is to propose in writing a settlement offer to the President, CEO (the highest-level of this company) via Certified Mail, then proceed as I mentioned above.

Also, keep in mind that the company can (if it finally decides to be reasonable) accept a settlement offer from you at any point (whether now, after suit is filed and prior to trial, or even after a Judgment is entered, if the matter goes that far).

 

[lwpat]

What you might think about doing is to give them a personal guarantee but realize the risks. This makes you personally liable for business debts. It takes about two years to
get anything thru the courts but they can ruin your credit rating. I would not pay them anything unless they agree to some terms. Offer to pay a reasonable interest and monthly payment. If they don't accept, start a separate account and set aside a monthly payment until you have enough to make a settlement offer.