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Expert: - 9/14/2009


Question
I am a small proprietor that has recently closed my store front and run my business from my home to try to get through the slump. I have a large debt owed to one of my wholesalers which I am unable to pay. They will not take any less than a thousand a month which I don't have or they are taking me to court. It's not that I don't want to pay I can't right now. If I pay what I can I am not getting anywhere because of the finance charges they are putting on it. When it goes to court, what can they do to me to try to collect. Garnishment, lien on house, attach my bank accounts or what. I just filed bankruptcy two years ago so that is not an option.

Answer
Karen,

If you are really unable to pay what they are asking, the judge will look at your finances and decide what you can pay, so if he decides you can afford $1000.00 a month he will order that as the payments.  If the judge thinks you can pay $2000.00 a month based on your financial paperwork, he will order that amount.  

Normally, when someone takes you to court they sue for the full amount and not payments, they will let the judge know they offered a payment arrangement and it was not met.  The judgments normally are granted for the full amount and if you cannot pay that amount within 30 days the company will file for periodic payments, that is when you would bring your financial paperwork to court and the judge would look at them to decide what you can afford to pay. If he orders a specific monthly payment and you do not make those payments, since the "payment arrangement" at that point is a court order, you would be violating a court order which is punishable by being arrested if the company pursues it through the court system.

Depending on your business, if it is a sole proprietorship, an LLC or an S Corp, would depend if they can attach any personal property. If you are an LLC for example, they would attach your business assets if you don't pay once they have a judgment.  This can include bank accounts, property, vehicles, inventory etc.  

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Michelle Dunn

Expertise

As one of the Top 5 Women in Collections, one of the Top 50 Collection Professionals, and winner of the Business Excellence award, I can answer any questions about debt, debt collection, improving business credit, creating a credit policy, enforcing a credit policy and collecting on past due accounts. I can also answer questions in regards to starting a debt collection agency since I have been a bill collector for over 24 years, started and ran my own collection agency for 8 years, and maintain my 12 year old Credit & Collections Association for members of the credit & debt collection industry. I am also the author of the popular and award winning book "Starting a Collection Agency, how to make money collecting money" now on it's 3rd edition. This book has won a the Writers Digest self published award as well as the New York Book Festival Award. I am a repeat contributor to the Wall Street Journal, and have been featured on NPR, CNN, as well as many other national radio and television programs. I have also been featured in national publications such as the Wall Street Journal, Forbes, Smart Money, MSNBC and much more. I have 17 published books to my name and am an accomplished speaker and consultant. I currently write 9 columns for newspapers, magazines and online portals worldwide.

Experience

I have over 24 years experience in debt collection, I started and ran my own collection agency for 8 years and I am the founder & owner of my Credit & Collections Association that I founded in 1998. www.credit-and-collections.com

Organizations
My Credit & Collections Association, I was also a member of the American Collectors Association and Plymouth Chamber of Commerce for 11 years. I am a member of many writing groups as well as my local Women Inspiring Women chapter. I am a member of Know More Media as an expert for their blog on business credit.

Publications
Business NH Magazine, Smart Money Magazine, MSNBC, CNN, Forbes.com, The Wall Street Journal, Home Business Magazine, Entrepreneur Magazine and website, many books, newspapers and television programs as well.

Education/Credentials
I have written 17 books in my collecting money series and one for Entrepreneur Press called the Ultimate Credit and Collections Handbook. My newest book is being published by John Wiley & Sons in May titled, The Guide to Getting Paid, how to weed out bad paying customers, collect on past due balances and avoid bad debt. This book is also being sold to many colleges as a text book.

Awards and Honors
My book Starting a Collection Agency, how to make money collecting money won an award from Writers Digest and the 2007 New York Book Festival in the "How to" category. I have won 2 awards from Dun & Bradstreet and Governor Jean Shaheen. I was nominated as one of the Top 5 Women in Collections twice as well as having been selected as one of Collection Advisor's Top 50 Collection Professionals by my peers.

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