Legal Question in Business Law in Texas

Re: SBA issuing a judgement against me

I'll answer question 2 first, since it has a bearing on question 1. The collection agency cannot issue a judgment against you. Only a court of law can do that. So the holder of the note would have to sue you before they could get a judgment. If you are sued and a judgment is filed, your non-exempt assets can be seized (examples of *exempt* assets are your homestead and tools of your trade; ordinarily, these cannot be seized).

Question 1: If you and collection agency reach a payout agreement, you need to make sure they agree that the payout will be in complete settlement of the debt. This way, there will be no lawsuit and therefore no judgment. However, there could still be a negative entry with the credit bureaus.

Question 3: It is difficult to know the best way to handle this without knowing more about your complete situation. If this is the only difficult debt you have, and if you can get the collection agency to agree to a payment schedule you can live with, then settling with them might be the best solution. But if there are other debts out there, you might want to consider other options, such as bankruptcy.

As far as protecting your wife's credit, again more information would be necessary in order to give any meaningful advice.

If you are in the San Antonio - Austin corridor area, please feel free to give me a call. I help people manage their debt and get their lives back on track outside of bankruptcy. If it looked like bankruptcy might be one of your options, I could refer you to a good bankruptcy lawyer.

Barbara Lamar

Law Offices of Barbara Lamar

127 Lewis Street

San Antonio, TX 78212

210-223-9389 (San Antonio)

512-376-4235 (Austin / San Marcos / Lockhart)

Re: SBA issuing a judgement against me

First of all, the only person that can issue a judgment against someone is a judge after a trial or an agreed judgment. No lawsuit, no judgment.

If they'll agree to a payout, then there may not be a lawsuit. But $100 a month to pay off a $16,000 debt is ridiculous. You're talking a payout of over 13 years. If you're going to try and compromise and settle this debt, you'd best be looking at something around $1,000 a month.

Since your wife co-signed in the SBA loan, she's on the hook for the debt as well as you. The fact that the business went from a sole proprietorship to a corporation doesn't change the fact that both you and your wife signed personally for the debt.

You might want to discuss your situation with a lawyer that specializes in personal bankruptcy.