I am struggling to locate the person who used to own my business- I keep

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Proper Cup of Coffee

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getting their collection calls, etc..? I own a business and the previous owner is apparently a major deadbeat. I have been receiving a ton of collection calls and threats from her creditors, and today I was served with a wage garnishment for her-- she doesn't even work here!

I am so mad that I really don't know what to do. She refuses to return my calls and emails and letters, so I'm not sure how to get in touch with her so I can give these people her new information. I don't want them bothering me anymore.

I am on friendly terms with her ex husband, so I was thinking of emailing him to ask where she is and where she lives. They have split custody of their son, so I know he knows where she is. I'm just wondering if this puts me in a bad position, like taking the law into my own hands.

I just want these creditors to leave me alone and for them to get their rightfully deserved money.

Should I contact her ex husband to at least get her forwarding address? She is basically MIA on all other counts, when she knows people are looking for her. Please help. Thank you.
I forgot to mention that I do not own her debt. She signed an indemnification clause stating that she would be responsible for ALL past debts associated with the business.

My contract with her is rock solid. I don't have any responsibility and I have told this to the creditors, which understand completely, they just have to call me out of procedure apparently.
One is a debt associated with the business, but because she signed our purchase agreement the way we had it written, we are certainly not responsible for it.

The other is a personal debt, of which she owes money to a car company.
 
Hire an attorney.

An indemnification clause is not what you think it is.

If there are valid debts owed by the corporation, the indemnification clause means she "promises" to cover your cost of dealing with them. That means nothing until you've lost something. It means nothing to the creditors, if their debt is from the corporation and not her personally. I could "indemnify" you from your Mortgage, but the Lender would still foreclose on YOU, and then you'd have to come after me later.

You need to sort out whether these are hers personally, in which case the attorney writes a FOAD letter to the creditors, or if they are valid against the business, in which case you do have a problem, one that is made worse by not knowing about it for certain.

Let me point out to you that your contract is anything BUT "rock solid." You can't even get her on the phone, how do you expect to get her to live up to her promise of indemnification?

They aren't calling for procedure. They want the money.

Call a lawyer.
 
Are these personal debts, or business debts?

In most cases when you buy a business you take ownership of the debts too.

The vendor advanced credit to "Amalgamated Widget Sales", and doesn't care who owns the company this week - they didn't give credit to "Jane Smith".

If they are personal debts, then simply tell the callers she's no longer there, and to stop calling. It's best to put that in writing.

EDIT.....
An indemnification clause means that she is responsible to YOU for any debts. It does NOT release the company from liability to the vendor, unless the vendor has agreed in advance.

Example....
ABC flour agrees to sell $1,000 worth of flour to "Tina's Donuts", on credit. The contract is in the name of "Tina's Donuts". Tina sells the business to John, and signs an indemnification clause agreeing to be responsible for any unpaid bills from prior to the date of sale.

ABC calls the Donut shop and asks for payment. John tells them "Tina is responsible for that bill." ABC will, since they want to maintain a business relationship with John, try to colect from Tina. If they can't, however, they are perfectly free to require "Tina's Donuts" to pay - that is who their contract was with. John will therefore be liable to ABC for the $1,000. If he refuses to pay, ABC can sue "Tina's Donuts" for the money - and will win.

If he does have to pay it, however, he can then sue Tina for the money, because she has broken her contractual agreement to indemnify John for the business' old debts. That indemnification, though, does NOT get "Tina's Donuts" off the hook, despite the change of ownership - it just allows John to recover from Tina (IF she has the money to pay with!) if she fails to pay them herself.

Richard
 
Actually, if you bought her business and the debts are related to the business, you own the debt now also. Better find a good lawyer to check and make sure.
 
Actually, if you bought her business and the debts are related to the business, you own the debt now also. Better find a good lawyer to check and make sure.
 
Actually, if you bought her business and the debts are related to the business, you own the debt now also. Better find a good lawyer to check and make sure.
 
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