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sammelv · Oct 8, 2009, 08:09 PM

I have a small business and owe for some material used in my business. The creditor had "credit insurance" & filed a claim because our account was past due, so they (creditor) was paid in full by the insurance company. So now, the insurance company is coming after me. The total owed as of 5/09 was $13,000.00 & I have paid $750.00 monthly with the balance now of $10,000.00. I was unable to pay for September due to lack of work. The monthly payment was set by them & I have not signed anything agreeing to pay $750.00, I told them I would pay all I could each month. Due to the economy and lack of work (in construction business) I am behind on all of my bills & it was either pay for the vehicle we use in our business or pay them, so I paid the vehicle payment because we would not have the business & I told them that this was what I had to do. Today, Oct 8th, I received a letter from the "credit insurance" company stating that unless they receive the total balance in full that they would file a judgment, levy all of my assets & hold public acution to fulfil this debt. I have not denied owing the balance & I am trying my best to pay it. I have tried to borrow money to pay this off but because of no work & my late payments on my accounts, no one will make me a loan. Can they file the judgment, levy etc? Any suggestions??

JudyKayTee · Oct 8, 2009, 08:49 PM

Inability to pay is not a legal defense.

Yes, they can sue you, obtain a Judgment and use any legal means in your State to collect.

If they sue you, do you have a legal defense?

ScottGem · Oct 9, 2009, 05:17 AM

It does not matter that you had no written agreement to make payments. The written agreement was when you purchased the materials on credit.

So, yes, they can file suit against you. If they win a judgment which seems very likely, they can attach any assets you have to pay the debt. If those assets aren't enough to cover the debt they will be able to go after personal assets if your business isn't setup as a corporate entity.

The only recourse I can see is to file for bankruptcy. There are different levels of bankruptcy. Some will allow you to maintain your business while protecting you from creditors until you can recover. I suggest contacting a bankruptcy attorney to see your options.