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| *Loan,banking and credit>>>credit line |
Can a bank sue for not paying a Small business line of credit??? |
Owes about $9k - its been late for 120 days and its going on collection soon. I got a call from the bank saying that they will sue me if i dont pay it soon. i got behind and now they want me to pay the whole thing. any experience???? need help. Anyone can sue for anything. The question is, will they have a legal basis for their suit. A line of credit is simply a loan, only you get the money as you need it, and only pay interest on what you take out. If yours is a small company, it is likely the line of credit is personally guaranteed by whomever the owner is, and whomever else signed the loan. If you default, the bank can take you to court, and will ding your credit report. If yours is a larger company, and the line of credit is not personally guaranteed, while the bank will have no problem launching suit against the company, it will be harder to sue the owners (if they gave no personal guarantee). What I would do is send them a letter. Be very upfront. I know I owe you this money, I simply cannot pay it. I request a meeting with you to discuss a plan for me to meet my obligation. Emphasize you do intend on paying. Meet with them, suggest breaking what you owe up into smaller monthly payments that you can afford. Send a certified letter after confirming the discussion, whichever way it went. Bottom line, handle this in an open way. Show intent to pay them back. The cost to take you to court will likely result in them not actually taking you to court, so as long as you handle this in an open way, they probably will accomodate. You might want to try to get a promise that they will not ding your credit, but i'm not sure whether that is possible or not. I've seen that the key to handling issues like this is to just be very open and honest. Don't hide. Answer your phones. Know this will pass eventually. Think of this as a test of your character. Weak people run from problems. Strong people face them head on with resolve. In the scheme of things, $9k may seem like a lot of money, but it is not. Of course they can sue you..You owe them money! Sounds like your in trouble yes ur credit could be in trouble The bank can call the loan in default and usually go after you if you signed as a personal guarantor for the small business. They would generally be entitled to the full amount due, interest, court costs, and attorneys fees if the contract allowed. (most bank lines of credits allow for attorneys' fees in case of default.) Anyone can sue anyone for anything. Whether or not they will win a judgement is in the proof. They can sue you and you can be ordered to pay it by the court if you don't catch up on your payments. Yes, they can sue and win. Your best bet is to try to work something out with them. You might get a lawyer to negotiate on your behalf. if you fall behind on your credit....the financial instituition is entitled to pursue you for recovery of debt.....yes you can be taken to court....generally what they do is try to come to an arrangement of repayment that you can afford....if the debt is secured by an asset they can also repo the asset to help recover their debt...... |
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