Carson, CA asked in Business Law and Civil Litigation for California

Q: A former business partner put our checking account in 12k of debt and will not return my attempts at contacting him.

I started a business with a friend, with no contracts between us. I stopped doing business with him, but there was a debt on a CC I opened for the business that he put on there without my approval and was slowly paying it off using the joint business checking that he continued to use for the business. I left both accounts open until he could pay off the CC, which was almost paid off, but now he has put the checking acct at almost -12k overdrawn and is no longer answering my calls or txt messages. There is also still a 1K balance on the credit card. What can/should I do?

2 Lawyer Answers
Robert Kane
Robert Kane
  • Eagan, MN
  • Licensed in California

A: It appears you have a general partnership. "A California GP must have two or more persons engaged in a business for profit. Except as otherwise provided by law, all partners are liable jointly and severally for all obligations of the partnership unless agreed by the claimant. Profits are taxed as personal income for the partners." See the Secretary of State's website.

Leaving both accounts open wasn't a good idea. You may want to negotiate an agreement with your partner or consider suing him. I am not sure how a judge will rule. It may be worth consulting with an attorney who possess more details of the situation.

James L. Arrasmith
James L. Arrasmith pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
  • Sacramento, CA
  • Licensed in California

A: In a situation where a former business partner has put your joint checking account in significant debt and is unresponsive to your attempts to contact him, it is advisable to consult with a business attorney who can provide legal advice tailored to your specific circumstances. They can help you understand your options, such as pursuing legal action to recover the funds, resolving the outstanding debt on the credit card, and potentially terminating any remaining joint financial obligations. It is important to gather any relevant documentation, such as bank statements and communication records, to support your case. An attorney can guide you through the necessary steps and help protect your interests.

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