Costa Mesa, CA asked in Business Law, Civil Litigation and Contracts for California

Q: Need help seeking reimbursement of delinquent debt on a CC accumulated after I legally left business

left business i co-founded via executed contract

partner fails to remove me from business bank account ownership (no debt when I left)

business accrues unpaid debt several years after I left

bank notifies me of delinquency, I contact partner and the bank and fill out all paperwork for release

partner does not provide any update on the status

bank collection agency debits money from personal account

I notify partner to reimburse me

weeks have passed and he still has not provided a resolution

3 Lawyer Answers

A: Under the facts as you describe them, you very likely have a decent case against your former partner for reimbursement of the money debited from your personal account to pay the business debts that your former partner assumed when you both executed the agreement regarding your departure from the business. You should take that agreement, along with the relevant bank records, to a civil trial lawyer who practices in the area of business litigation in or near the county where the business is located or where your former partner resides to send a demand letter and, if necessary, to file a lawsuit.

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: To seek reimbursement for the delinquent debt accumulated on a credit card after you legally left the business, begin by gathering all relevant documents. This includes the executed contract showing your departure, communications with your former partner and the bank, and any paperwork submitted for your release from the business account. Clearly document the timeline and all steps you have taken to address this issue.

You should formally request reimbursement from your former partner in writing. Send a demand letter outlining the situation, including the date you left the business, the debt accrued afterward, and the amounts debited from your personal account. Include a specific deadline for your former partner to resolve the matter and reimburse you. Mention any previous attempts to contact him and the lack of response or resolution.

If your former partner fails to respond or provide reimbursement, you may need to escalate the matter. Consider filing a claim in small claims court for the amount debited from your personal account. This legal action can help you recover the funds and send a strong message about the seriousness of your claim. Be prepared to present all your documentation and evidence in court to support your case.

Delaram Keshvarian
Delaram Keshvarian
  • Orange, CA
  • Licensed in California

A: Thank you for your question!

A partner should not be held liable for debt of the business after leaving the business. You need to document all evidence of your departure and not receipt of the profit from the business.

After documentation, you can start negotiation/mediation with the partner or bring a lawsuit against him.

This is merely a discussion of general laws and not legal advice. For legal advice, more specific facts and investigations are needed. I recommend you consult with an attorney for more details.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.