If a civil judgement was awarded againt me but the company closed down, do I still have to pay?

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If a civil judgement was awarded againt me but the company closed down, do I still have to pay?

I had a business 6 years ago. I opted out of my lease earlier and the landlord said it was okay. Later I found out that I was being sued; a judgement was issued for non-payment ( $5,000) which was ridiculous. We were friends and I was to trusting and didn’t get anything in writing. However, now their company closed down.

Asked on March 28, 2012 under Bankruptcy Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Even if the company has shut its doors or closed it's operation, you would have to pay (there is someone to pay to) in any of the following situations:

1) The company was a corporation or LLC and, while out of business, still exists; since it still exists, it is entitled to payment on the judgment.

2) The company was a sole proprietorship; in that case, the owner is entitled to payment of the judgment, since he and the company are effectively one.

3) The company sold or otherwise transferred its right to be paid to another person or company.


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