Legal Question in Credit and Debt Law in Pennsylvania

Re: Application of overpayment on business accounts

If one company sends a payment of a debt to another company which used that payment to eliminate the debt,there is no legal problem. If the debtor corporation sends a payment to one corporation to whom it owes money, and a third corporation obtains the funds, there may be a problem. If the third company obtained it by trickery or theft, the third corporation may be commiting a crime. If the treasurer of the third company is also the treasurer of the second, or creditor, company to whom the check was sent as intended by the debtor, there may have been no crime committed in the obtaining of the funds, but there may be in failing to make required distribution of funds to the debtor--especially if the third corporation does not have a judgment to vindicate what it thinks are its rights vis-a-vis the debtor corporation. However, there may be a relationship between the debtor and the third company, either by practice or contract, that would remove the criminality. You need to consult with counsel. I am available for consultation at (215) 854-6343. Robert M. Lipshutz, Esquire

Re: Application of overpayment on business accounts

Simply stated it is improper to take an overpayment from one company to pay the debt of another. However, the facts of this situation should be reviewed by an attorney. Are the companys corporations or is the same individual running both companies? I suggest you consult an attorney and have him review the facts in detail.

Thank you for submitting your question. If I can be of any assistence please let me know.

Gerald Hershenson 21-579-9390

www.bucksattorney.com