Legal Question in Credit and Debt Law in Michigan

Standby Creditor's Agreement

I sold a business and finaced part of the amount $54000.00. The purchasers was to pay me monthly payments for four years and then a ballon of $30000.00.

They have paid all the monthly payments for the four years but have defaulted on the $30000.00 ballon payment.

The purchasers had made a loan thru SBA and SBA had me sign a ''Standby Creditor's Agreement That states'' ''to take no action against Standby Borrower's collateral, without written consent from the lender, until lender's loan is satisfied''

The business is a machine shop and all of the equipment was collateral for my loan of $54000.00.

I need to know if I can take some kind of action to protect my interest in the collateral in his possesion, so that if he were to try to use it agin as collateral for a loan that it would show that I have a interest in it. And also can this loan be show on the purchasers credit report as being in default, to protect my position.

Thanks Joy


Asked on 1/04/05, 5:52 pm

1 Answer from Attorneys
Jesse Sweeney Sweeney Law Offices, P.L.L.C.

Re: Standby Creditor's Agreement

You should have done this long ago, but you need to file certain documents to protect your interest immediately. It would be best to have legal counsel for this. My only hope is that the buyer has not already taken out a subsequent loan on the collateral.

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Answered on 1/04/05, 10:52 pm


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