Legal Question in Business Law in Arizona

Paying a Draw Back

I have been working for a company for three years that offerd me a position in sales working off commisions. This company incorporates you and sets you up with a draw. What can they do to collect outstanding draw, what if I can not pay it back in a timely manor? and can you claim bankruptcy on this outstanding draw balance? They have decided to terminate me due to sales not being where they want them.


Asked on 8/06/02, 7:57 am

1 Answer from Attorneys
Robert Lord Berens, Kozub & Lord PLC

Re: Paying a Draw Back

It sounds quite possible you may not need to pay the draw back, but you'd need to have someone look at the documents. If they incorporated you, and the corporation took the draw, and there is nothing left in the corporation, then it may be there is nothing left for your former employer to collect. YOu could claim bankruptcy, but it may not be necessary if the draw is a corporate debt. YOu also may have the ability to claim the draw was a draw against corporate earnings, and when they fired you, they forfeited the right to have the draw repaid.

I hope this helps.

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Answered on 8/06/02, 11:58 pm


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