Legal Question in Business Law in Missouri

Accounts Payable

My wife and I own a small business. We have not been successful over the last two years and have accumulated a lot of debt, both personal and business. We do not have any credit lines available. We notified our vendors that we had every intention of paying and that we would try to pay them something a little at a time to show that we would pay the full amount. We have struggled to do so, but have tried to send everyone a small amount, (sometimes as little as $25 per month). I have a few vendors who have begun getting luder and liuder or have turned the amounts over to collections. We have spoken with some of the collectors and told them what we can and can't do, and most have worked with us. But what can a vendor do to our company if they insist that they want their money in full right now? We can't come up with all of the money, even if they said we had to, we can't. We are becoming more successful and I believe over the next year could have success that makes most of this debt a memory. What can they do to us, can they make us pay any certain amounts, or can we pay small amounts as we can as long as it is consistent.

Thanks


Asked on 11/23/05, 6:26 pm

1 Answer from Attorneys
Michael R. Nack Michael R. Nack, Attorney at Law

Re: Accounts Payable

For some unknown reason, many people think that they can avoid collection by making small regular payments. There is no basis in the law of which I am aware for this belief. If your vendor, or any creditor for that matter, accepts your proposed arrangements, then fine. But, if your business or you personally owe someone money, that person does not have to accept small regular payments. They can generally file a lawsuit against the entity and/or individuals responsible for the debt, obtain a judgment, and file garnishments or executions in an effort to collect the judgment amount plus interest and costs. If there is a written contract that provides for the debtor paying the creditor's attorney's fees, then that amount may be added to the judgment as well. There are facilities such as Consumer Credit Counseling which help debtors work out arrangements with creditors, and are often more successful because they can emphasize the possibility of bankruptcy under which the creditor would most likely receive nothing. If you haven't already done so, you should consult with an attorney.

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Answered on 11/23/05, 11:15 pm


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