What to do if I sold a business to a person but they sold part of the collateral used to secure their payments?

She is financed at the bank and a development foundation and another individual besides myself. She is financed at the bank and a development foundation and another individual besides myself. She had her home put up for the loans but has now sold the home. She has not paid off any of the debt on this business. She had dropped my monthly payment from $500 per month to $25 per month and has leased the business to another person. I have papers from a lawyer that were signed when the loans were made stating the amount and the scheduled payments.

Asked on August 7, 2013 under Business Law, Mississippi

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

You can sue her to recover the money she owes you under the terms of the contract(s)--she is not allowed to unilaterally (on her own) decide to reduce the payments she makes you. Having breached the contract by changing the terms of payment without your permission, she would be liable to you for what she owes you under the contract. If you had an actual security interest in her home, you may still have that security interest and may be able to require the buyer to satisfy it to have clear title; this can get complicated, so you are advised to retain an attorney.


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