Q: We loaned $5500 to a bus assoc on 10/20/14 w/principal to be paid in full 4/20/15. They defaulted, what is our recourse
Our LLC loaned the money to their LLC. They signed a Promissory Note. They agreed to $5,500 with interest from 4/20/15 on the unpaid principal at the rate of 12% per annum. They are a construction contractor so In lui of interest on the first six months they agreed to provide labor to complete improvements to our LLC's real estate (which they did). But they failed to make any payment on the principal and subsequent interest.
A: Your only recourse is to file a lawsuit on the promissory note in county court to collect the funds, or get a judgment that will entitle you to collect the funds. You will need to hire an attorney in your area to file the lawsuit as you are a corporation.
The first part is relatively straight forward and simple. You need to hire an attorney to file suit for breach of contract and obtain a money judgment against the company and the individuals if you had personal guarantees. Hopefully, your Note contained an attorney’s fee provision, so you can get your fees for obtaining the judgment.
Once you have a money judgment things get a bit more complicated. Your attorney will have to begin the process of post-judgment collection. Usually, an attorney will conduct some discovery and identify key assets upon which you can levy. Once assets have been identified, your attorney will ask the sheriff to assist in obtaining them and selling them. If the company has bank accounts, your attorney can garnish those. Sometimes, these collections are quick and easy, sometimes they are difficult. But an experienced attorney will guide you through the process and should be able to tell you, fairly early on, how likely you are to recover fully. Good luck!
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