Legal Question in Business Law in California

I owe a company about $34,000.00 and I have been paying it off through the years. I still owe about half of the amount. The funny thing is in the beginning he would provide me with receipts with his company name on it with a track of what i paid the amount and date. Now when I ask for a receipt from them they provide me with only the track record of the date and how much i paid. His company name and other information is no longer on it. Just a spread sheet with what i paid from the beginning until today. I have asked him to provide me with a receipt that has his company name on it so that it shows I have been paying the account. He refuses my request with an excuse each time. My question is, has he declared this bill a loss and is he trying to collect money on the side from it? Is there any legal action to protect myself from being sued later on if i stop paying him?


Asked on 5/06/10, 5:24 pm

3 Answers from Attorneys
Anthony Roach Law Office of Anthony A. Roach

I wouldn't know what he is claiming as a loss without reviewing his tax records, nor would I know what he is doing on the side.

It sounds like you have an open book account, that may have turned into an account stated. If you stop paying on an open book account, he can bring a lawsuit against you within 4 years of your last payment.

I suggest saving the receipts.

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Answered on 5/11/10, 8:10 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

I don't think you are in a good position to stop paying without the possibility of a successful lawsuit to enforce the obligation. A business can sell, assign, transfer, etc. its assets to someone else, including its receivables. You don't have a statute of limitations defense either, because this is an "account stated" and/or a "book account" where the limitations period starts anew with each part payment and/or each statement issued by the creditor to the debtor. If you are not paying interest and don't deny that you got value in exchange for the original indebtedness, I think you should feel moderately fortunate that the creditor has been lenient. If the creditor had sued and obtained a judgment against you "way back when," it would be accruing 10% interest. As a suggestion, maybe you could negotiate a smaller lump-sum payoff.

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Answered on 5/11/10, 8:44 pm
Kevin B. Murphy Franchise Foundations, APC

As the other attorneys have said, you still owe the outstanding balance. Although your treatment in terms of the receipts provided raises some questions, only he has the answers and it doesn't change your legal position. He could have assigned your account receivable from the business to himself personally. Consult with an attorney in your area for more specific advice.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

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Answered on 5/12/10, 7:03 am


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