Is There Still Time To Seek Repayment Of Debts Owed To Your Business?
Kitab al-Muwashsha is a social etiquette manual written in Iraq in the tenth century. One of its chapters contains anecdotes and poems about how you should not promise to give people money and other assets that are not currently in your possession. Most businesses today do not follow this advice, nor would it be practical for them to do so. If you operate a business, it is almost certain that you owe plenty of money to plenty of people, and there is not enough in your bank account to pay off all your debts; you are lucky if there is enough even to meet your obligations for the next installment. Likewise, customers and other parties owe you an assortment of outstanding payments, and you make promises to your creditors based on the payments that you can reasonably expect to collect. The winner in all of this is the collection agencies that will happily buy your debts for a small fraction of their original value. Which debts should you sell, and which ones can you still hope to collect, or at least settle for a reasonable amount? Contact a Los Angeles business litigation lawyer to strategize.
California Debts and Their Statute of Limitations
California law allows creditors to file lawsuits in order to collect unpaid debts as long as the statute of limitations on the debt has not expired. The law even allows businesses to sue consumers over unpaid bills, although you are not alone if you think that business to consumer lawsuits are unethical. The statute of limitations for most debts is four years. The only exception is debts formalized by oral agreement; in which case the statute of limitations is two years. Every time the debtor takes an action related to the debt, the statute of limitations resets. This means that you count the four years from the last time the debtor made a partial payment or even made a verbal promise to make a payment.
Does the Unpaid Debt Warrant a Breach of Contract Lawsuit?
It is bad enough when a business partner, supplier, or other party with which you have done business does not pay you what they promised to pay. Sometimes, though, their failure to keep their promises causes you to incur other financial losses, in addition to the money that they failed to pay you. If your businesses suffered financial losses because of promises that an individual or company failed to keep, you could have grounds for a breach of contract lawsuit. In order to file a breach of contract lawsuit, though, you must prove that you and the other party signed a written agreement and that you held up your end of the agreement, while the other party did not.
Speak With a Los Angeles Employment Discrimination Lawyer
A Los Angeles business dispute lawyer can help you resolve disputes related to breach of contract and other matters where individuals and companies owe outstanding debts to your business. Contact Obagi Law Group, P.C. in Los Angeles, California to discuss your situation or call 424-284-2401.