Q: Can I sue a business for a personal loan they refuse to pay back?
About a year ago I loaned a local business 15k to get started, now they will not respond to emails or phone calls. Do I have a chance to sue and get any money back? We signed an agreement we drafted but lawyers were not involved.
A: Nobody can give you a meaningful answer without carefully reviewing the written agreement. Nothing you have posted says you couldn't sue and win but then again, nothing says you will win either. Consider taking it to an attorney for review and advice on how to best proceed now. Good luck.
Joanne Reisman agrees with this answer
A: Yes you can sue to get money back you loaned if the repayment is due. You don't say when the money was supposed to be paid back so I can't tell you if you can sue now or you have to wait for the due date to come and go.
Generally speaking you would want to send a demand letter for your money first and put the language in the demand letter that "time is of the essence" which means that you now want to enforce a time limit that you had previously been flexible on and in that letter you might need to give some type of deadline that you need payment by. You want to do this because you don't want your case dismissed because the deadline to pay you wasn't a strict deadline or you had waived it by not making a set demand when the money was first due. Since it is important to do this correctly I would hire an attorney to send the demand letter. Also getting a letter from an attorney might show that you mean business and you might just get paid.
But I want to warn you. Startup businesses often fail, and a sign they are failing or struggling is that they don't pay their bills. So the refusal to respond could be a warning sign that the business might be on the verge of collapse or bankruptcy. The failure of a business or the filing of a bankruptcy might wipe out the debt you are owed and then you never get paid. Probably the Attorney that you ask to help you with the demand letter can better assess this risk. (It depends on who is responsible for the bill - a business entity or a person, and then it depends if the person or business has assets sufficient to pay all the debts. Understand that a lawsuit doesn't necessarily yield money, it only yields a judgment which you will still have to figure out how to collect and which can be wiped out with a bankruptcy.
You should never lend more money then you can afford to lose, and while you were smart to get a written agreement, it would have been better to have secured the loan with a lien on some type of property. It is also best to have someone with assets personally guarantee to pay a business loan.
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