I am being sued by Sherman Acquisitions for a Commercial Home Depot Account. They are suing my LLC. If they receive judgement, what can they do to collect? There is no bank account and no assets. They address the papers were served to is my folk's house, where I operated the business from. I don't live there. I answered the complaint and disagreed with some of the paragraphs, hopefully to stall the whole process. Any input greatly appreciated. Ken.
Was the account in the company's name? I'm not sure if they can "pierce the corporate veil" in the case of a LLC or not. I haven't kept up with business law. If not, they can only take any assets that belong to the company. They could also file the judgment and keep it renewed so that if the company ever gets any assets they can be seized.
No - was hoping to not have to go that route. The LLC is totally inactive, and I didn't give a personal guarantee on the account. Ken
I think if you didn't personally guarantee the account and you don't reactivate the business, you should be OK.
In other words, if they secure a judgement, can they show up and bang on my folk's doors? Most of the stuff I bought was raw building material and they'd have a hard time recovering that. Ken
I don't know about that. If that's the legal address of the company, I guess they could show up there. But they'd have to prove that anything belonged to the company. There was a thread recently about avoiding a repo. One of the tactics is to just say "that belongs to someone else." In this case, your parents would be saying "that belongs to me. XYZ LLC no longer exists and owns no assets."
Did this creditor actually file suit? Were you served a summons, and served properly? If so, they can only get a judgment if you don't show up to court on the hearing date and they are given default judgment, or if you show up in court and lose the case. You have to have a good case as to why you don't owe the money, or willing to work out a payment plan or lump sum payoff in court or before court, which is why you might want to seek advice from an attorney because if your LLC is disbanded and they cannot hold you responsible for the company debts, then what claims to they have to begin with? They can come the address of the LLC, but cannot take anything that does not belong to LLC. That is the reason for forming an LLC, corporation, etc. It is mainly ofr legal and tax advantages. All that can be seized are assets of the LLC and if that LLC doesn't exsist anymore, than I do beleive you can be held liable for the company debt. Don't take my word for it though; I'd verify that with an attorney. It may be in your best interest to seek advice from an attorney though. See if you are sueable or safe if the LLC does not exsist anymore. I dno't mean to scare you, but when a judgment is possible, you don't want to take it lightly. Keep us posted.
"IF" the LLC is out of business (WITH NO RESOURCES LEFT)...and you did not act as a GUARANTOR...why would they expect you to pay them in court???
Re: Re: Judgement Against LLC? Like jen said...they are probably using this tactic to get him to pay, plain and simple. Before I got into credit repair, I was VERY intimidated by anything that looked legal relating to a debt of mine, let alone seeing a corut summons. People do not realize that the burden of proof is always on the CA or OC. And that you are protected under federal law!
Re: Re: Judgement Against LLC? like i said on another thread - if i knew then what i know now, i would have done it different. i didnt go to court, would pay whatever they told me i owed, etc, etc. credit repair is like a 12-step program - the first step being that you have to admit you don't really understand credit repair.
Re: Re: Judgement Against LLC? They served my mother (her house) with the papers and had the LLC listed as the Plaintiff. Next to that was my name with "Agent For Service" listed, as that is how it's filed with the State as far as the LLC goes. I never signed anything to open the account and certainly gave no personal guarantee. I answered the Summons via certified mail today, so hopefully it delays any court action. On a page following their complaint paragraphs, it states that "...NOTICE IS HEREBY GIVEN to the defendant that the plaintiff intends to seek satisfaction of any judgement rendered in plaintiff's favor in this action from any debt accruing to the defendant by reason of the defendant's personal services." Scare tactic? Just how and what can they collect??? Ken
Re: Re: Re: Judgement Against LLC? can they serve his mother since she isn't an agent for the company? question: when the account was opened did you give your ssn or the companys TIN?
Re: Re: Re: Judgement Against LLC? Company's TIN number. Any credit I ever established (otside of American Express and Capital One Business Visa) we solely in the name of the LLC. I got lucky in that respect, I suppose. Ken
Re: Re: Re: Judgement Against LLC? so in other words if they successfully got a judgment it wouldn't affect your credit. did you say when court was or hasn't it been determined yet?
Re: Re: Re: Judgement Against LLC? No. My return date for the Summons is tomorrow, and I sent the Answer today, via certified overnight. From there they will probably come up with a court date. Should I be so bold as to not show up for court? If they are going to get a meaningless judgement, why waste the time? Ken
Re: Re: Re: Judgement Against LLC? maybe some of the legal experts here can answer the question about this. my understanding is as follows: you are considered an "agent" of the company, ie, authorized user. since there was no account in your name, signed by you, or obtained under your ssn you cannot be held liable for this account. GET LEGAL ADVICE ON THIS, HOWEVER, AS MY KNOWLEDGE IS STRICTLY WHAT I HAVE READ/EXPERIENCED. How did you respond to the summons?
