HI I live in Texas, I took an business SBA Loan which was granteed through ABC Bank. I have defaulted on the Loan, business is very bad and I have not been able to meet my monthly payment since OCT of 2007. I have now being sued by this bank and was served my paper on Saturday 06/22/08. What exactly or where to I start. I am in very bad finanical situation. I have lost my credit due to this business, and only thing I own in my name as of date is a car which I have sold to my sister over 1 year ago. She still has not changed the title, can that car be taken away? I am not legally married so my boyfriend should not be affected right. I don't have any savings right now and not sure where to start. Help.

Hello grace:

This is the BEGINNING of the lawsuit. You're a long way from a judgment. Even if they DO get a judgment, they don't want your/sisters used car.

She SHOULD register it in any case. If YOU don't have a bill of sale, YOU are liable for anything she might do with YOUR car. That's ANOTHER can of worms, that you DIDN'T ask about, and I won't comment on further.

There's only ONE advantage to being broke, and that is they can't get blood out of a turnip. You're, in effect, judgment proof. Once the bank and/or its lawyer realize that there's nothing to get, they'll go away - maybe.

I say maybe, because this was a business loan. Were it a credit card loan, I wouldn't have attached a maybe. You are apparently an entrepreneurial type person. You aren't ALWAYS going to be down. They know that. If they get a judgment, it'll be good for 10 years and can be renewed for another 10.

So, unless you plan to be broke for a while, or you think you can make them THINK you're going to be, you're either going to have to settle with them, or declare bankruptcy. You didn't say how much your balance is, and it's expensive to declare bankruptcy, so I don't know if that's what you should do.

As long as you don't have ANY joint accounts with your b/f, he's going to be safe from all this.

If you want to play the "judgment proof" thing, write the lawyers a letter and tell them. No, they're not going to believe you, but they WILL check it out for themselves..

If you want to do something else, let me know.

excon

excon covered a lot of ground. Just curious: was your business incorporated? Or did you make a loan with ABC Bank personally? You said you are in a very bad financial situation. That is why we have bankruptcy, either Chapter 7 or 13, in most instances. Check this: What Is Bankruptcy?