Will I ever see the money?

[vegetarian]

I recently sold a small business in CA and the buyer is no longer paying the payments according to the Contract/Sales agreement. If I were to take him to court and get a judgement against him, is it possible for him to be able to file bankruptcy against the amount that he owes me and get out of the court order?

 

[Zigner]

I recently sold a small business in CA and the buyer is no longer paying the payments according to the Contract/Sales agreement. If I were to take him to court and get a judgement against him, is it possible for him to be able to file bankruptcy against the amount that he owes me and get out of the court order?

Yes, it would be a possible option.

 

[CameronNewport]

Ideally you would have retained a security interest in the business so that you can protect yourself if you are not paid even if the buyer files for bankruptcy protection.

 

[vegetarian]

Ideally you would have retained a security interest in the business so that you can protect yourself if you are not paid even if the buyer files for bankruptcy protection.

The business was a coupon magazine publication which had many consistent clients that advertised in the publication. I could take back the business, but the buyer ran it into the ground and lost most of the clients which means the business is worthless and would take a lot of my time and money to get it going again. Regaining the trust of most of my old clients would be next to impossible. In short: I wouldn't want the business back and no one else would buy the business now that it's worthless.

So If I understand correctly, the buyer could file bankruptcy on this money, even if there was a court order to pay?

 

[Zigner]

The business was a coupon magazine publication which had many consistent clients that advertised in the publication. I could take back the business, but the buyer ran it into the ground and lost most of the clients which means the business is worthless and would take a lot of my time and money to get it going again. Regaining the trust of most of my old clients would be next to impossible. In short: I wouldn't want the business back and no one else would buy the business now that it's worthless.

So If I understand correctly, the buyer could file bankruptcy on this money, even if there was a court order to pay?

Why do you think you could "take it back".
Yes, he could still file bankruptcy.

 

[izzie01]

That happened to my father. It was a small engine repair shop. The person who bought the business was supposed to pay him over the next two years, never paid much. The decided it would cost more to go after they guy legally than what was owed, he closed the shop and disappeared. I think they did try to put a lien on his home but that didn't work. Their tax guy had them use it over a number of years as a loss, of course tax laws change. You may want to talk with a tax guy and see if that may be an option.