Legal Question in Business Law in California
old payroll debt
Our company payroll ck bounced at a check cashing place in 2002. We paid the employee the cash to take and pay the co which was in Los Angeles.
Our company declared bankruptsy in 2005. In 2007, we received call wanting payment on bounced check.
Are we supposed to pay it?
2 Answers from Attorneys
Re: old payroll debt
That depends upon what type of bankruptcy you filed, whether the payroll company was listed as a creditor and whether your outstanding account(s) with the payroll company were listed on the schedules filed in your bankruptcy. The bankruptcy does not affect any debts which are not encompassed by the bankruptcy. You should consult your bankruptcy counsel for advice on this issue.
The statute of limitation for open book accounts is four years. However, if sued you must raise the statute of limitation as an affirmative defense or you will lose the right to raise it.
Re: old payroll debt
You haven't provided enough information about the situation. If the employer is a corporation, than the employer did not receive a discharge of the debt in the bankruptcy. If the employer was an individual, the debt might have been discarged if it was properly listed.
The statute of limitation to collect debt be based on an "obligation or liability founded upon an instrument in writing" is four years. The time to recover on the bounced check may have already passed.
Contact my office if you wish to discuss the matter further.
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