Legal Question in Credit and Debt Law in Alabama

Is the Owner of a business liable in judgment against the business?

Subject (1) has been awarded a $20,000 judgment. Listed as Debtors in the judment are the 2 known business names and an employee of said business. It has been 7 years, can the judgment holder go after the PERSONAL property of the business OWNER to satisfiy the unpaid judgment since the business is no longer ' a business'? Thanks for your time!


Asked on 3/22/98, 4:06 pm

1 Answer from Attorneys

Yes, but it might require another step in court.

First, I have to wonder how come you're not askingthis of the lawyer that helped you get the judgment you have. Please let me know.

Second, why did you sit on your rights to collect untilnow? You may have let the assets get away. Judgments are generally only good for limited periods of time, though in Massachusetts it's usually 10 years.

Now that I'm through complaining, I'll try to answeryour question. Was / were the business/businesses which"had" assets incorporated? If they were, the legal baseline is that you cannot go after the assets of the owner. Thereare however ways to "pierce the corporate veil" butthey would require a suit or a motion to be approved by the court and the court will generally only do is there was eithersloppiness or a touch of fraud in handling the corporation or itsassets.

Assets of a partnership follow different rules but usually the generalpartner is liable and in those days was probably the party you call an owner.

A judgement against a sole proprietorship ought to be tantamount to a personal judgmentagainst the owner, making your life very much simpler. You'd probablystart by getting an injunction to, essentially, seize whatever asset or asset you find and prevent it from being sold by the debtoruntil he pays you off, with the threat of auctioning off what you have seized (and giving back anything over your judgment + expensesof the sale) hanging over.

Send me half of what you collect! (That's my fee for spending 5 minutes writing you e-mail!) Seriously, good luck.

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Answered on 4/01/98, 10:17 am


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