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Question
I gave a personal loan (with promissory note) to an LLC. They are struggling now,wanted me to take back equipment and call it even and I said no. They are now not making their payments monthly and threaten to just disolve the partnership and told me they will walk away from the loan. What rights do I have to collect my loan?
Mary,
Can I ask why you did not want to take the equipment back?
When you say you gave a personal loan with a promissory note to an LLC - was this a personal guarantee by the owner or someone who is a part of the LLC? You also mention that the LLC may dissolve the partnership - was the business an LLC or a partnership?
The laws will be different based on all of the above.
Right now with the economy in the state it is in, taking back the equipment rather than not getting anything at all would seem to be a smart option. If there is a reason you are not taking it back and they cannot pay, you may want to consult with an attorney in order to take them to court. Keep in mind that if they go out of business or file bankruptcy you will probably not get any of the money owed on the equipment, but maybe they can try to sell it to possibly pay off some of what they owe you unless they have other creditors before you such as a bank or larger vendor.
If you are not open to taking the equipment back I would consult with an attorney to see what your options are, but be sure to first find out if the debt is a personal debt, or the company was an LLC or a partnership. Also, bring any signed contracts, agreements or documentation you have in regards to the debt when you visit the attorney.
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Answers by Expert:
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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