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Am I responsible for a previous owners debt?

Hooksett, NH |

I bought a detailing business back in 2007. In the contract, I basically paid for the clients, and equipment to do the work, and took over a lease for the shop to work out of. Also, in the contract for the transaction I took over the business with a zero balance (meaning no debt, or bills current). Well, recently I've been getting calls from Dell computers collection detpartment. Today I got a nasty call from some A hole yelling at me saying I am responsible for a $5000 collection they have with the previous owner. They asked for the previous owners, and tried to certify my name, and address, etc. Once he found out I took over the business he then stated that I'm responsible for this bill. I don't even have the computer! Sounds like bull to me, is any of it true?

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Attorney answers 1


To answer this question we would need to know several things:

Assuming there was a valid contract with Dell, who were the parties to that contract? Was one of them an entity such as a corporation or an LLC, which you now own? When you bought the business, did you buy the shares of a corporation or LLC, or did you just buy the assets of the business?

If the business you bought has "legal personality," meaning it was a corporation or LLC that you took over when you bought it, and if that corporation or LLC was one of the parties to the contract with Dell, then you may be on the hook. But if the prior owner represented to you that the entity you bought had no debt, when in fact there were debts, the prior owner may be liable to you for the amount of the debt he failed to disclose.

If the prior owner's individual name is on the contract with Dell, well, it's not your problem.

If you dispute the debt, you should do so immediately, in writing.

There's probably more analysis that could be done, but I'll leave that for others.

Good luck. Don't take the above as legal advice since I'm not licensed in New Hampshire. If you need legal advice, please consult a New Hampshire lawyer.

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