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Can I be sued in small claims 3 years after selling a business for a business debt...there are no assets from the sale?

Manhattan, KS |

I signed an advertising contract written in my company name...could not pay off the contract at the sale and a letter was sent asking the creditor to write off the date and not company assets were available. now I am being sued personally. I live in Kansas.

Attorney Answers 3

Posted

More information is needed. What type of entity was your business? Where you incorporated? When did you default on the contract and when did you get notice of the suit? You need to sit down and talk with an attorney with this information before anyone can give you accurate information.

Law Office of Brandan Davies LLC. www.kcticketguy.com This is not legal advice. No Attorney/Client relationship has been formed. I may or may not be licensed in your jurisdiction. Please consult an attorney licensed in your jurisdiction for state specific advice.

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Posted

You should consult with an attorney. If your business was incorporated or was a limited liability company and you signed the contract on behalf of the company, then you should not be personally liable for this debt. Typically, it is signed as "Business Name, Inc. by: Your Name, President."

Also, if you treat the company as your own money and fail to respect the corporate formalities such as no shareholder meetings; fail to keep corporate minutes, etc., a creditor can "pierce the corporate veil" to attempt to establish that the shareholders, you, should be held liable. The creditor needs some evidence of this.

You should look at the paperwork for this contract. Also, if it is three years old, it may be barred by the applicable statute of limitations.

You should consult with an attorney.

By answering this question, general information is provided and no attorney-client relationship is established. For specific inquiries, you should consult with experienced counsel in your area.

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Posted

The first thing you need to do if and when you get sued is file an Answer. The summons will tell you that you must “appear” by way of an Answer in 10, 20 or 30 days, “depending on the method of service.”

PLEASE CHECK THE LAW IN YOUR STATE AS YOU MAY ACTUALLY HAVE TO APPEAR IN COURT, AS IN VIRGINIA, IN ORDER TO AVOID A DEFAULT!

You need a lawyer, but if you cannot afford one right away, rather then do nothing and have a judgment entered against you, is to “appear” by filing something!

Many people think this means they have to go to Court and this is incorrect. 90% of all lawsuits end in Default Judgments because the defendant (person getting sued) did not file an Answer.

I recommend you go to the free form I have on my website. Print it out and fill it out as instructed. You must answer the numbered paragraphs on the Complaint by writing them into the appropriate lines in the Answer. The Answer will allow you to preserve your rights and will prohibit a default judgment (i.e. you did not show up) from being entered against you.

Mimic the paperwork you got when you got sued. Answer all the paragraphs of the Complaint by writing the numbers in lines 1, 2 or 3.

Almost 100% of attorneys will deny what is owed because they did not do the calculations and do not know what the basis for the number is…

When you file the Answer that is your “not guilty”. You have the right to make the person suing you (Plaintiff) prove their case, but you must also answer the complaint truthfully.

Make sure you fill in the name and address of the attorney suing you before you bring this paperwork to the Court. Mail it to the attorney suing you right away!

Check out the guide I have drafted on the Avvo profile. This will provide more detailed instructions. If it is helpful remember to indicate that and get the guide read!

Good Luck!

REQUEST: Please give this answer a "thumbs up"(below) if you find it valuable.

Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship.

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