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  1. #1

    Default What Do I Do About This Debt?!?!

    My question involves collection proceedings in the State of: Arizona


    I own a Janitorial company iím going through some hard times right now.

    The way we operate is we make the sales and find clients and we sub out the contracts to subcontractors.

    I have a couple subcontractors (Vendors) that I owe money to because I had made bad spending choices on things that came up and I failed to regain the money back to pay for these subs. (Some business and personal related).

    I ended up filing for bankruptcy this year and included these vendors in my bankruptcy as creditors as I havenít been able to Get ahead.

    One of the subs included in my bankruptcy is still trying to collect on me. (Even though itís already almost discharged).


    They are now saying iíve Committed fraud and they want to peruse that and put me in Jail?!? I owed them about $800.

    Back when this was going on, I told the sub that the client hadnít payed me yet when they did to buy me some time to get the money together to pay them, but they found out and think Iím trying to hold out some sort of scam when that was never my intention.

    Iím only 20 with a baby on the way and Iím just trying to get everything back in order. I have a couple other Vendors that i have similar situations with and luckily they didnít pursue anything (they were also included in my bankruptcy).

    My intentions were never for this to happen but my spending habits and decision making has left me in a bad spot.

    Combined for all that I owe to subs, maybe totals $3000?

    I wish I could pay these people back right now but my bankruptcy forbids me from paying anybody back.

    Am I going to jail for this? Iím so scared and worried. I Just want to make everything right.


    to add: add this point we donít have any clients or vendors Iím working with as I donít have money to push the business.

  2. #2
    Join Date
    Jan 2010
    Location
    New Jersey
    Posts
    3,627

    Default Re: What Do I Do About This Debt?!?!

    If you have assets outside of the business, you most likely won't be protected against levy's and lawsuits due to using company profits to purchase personal belongings. Can you go to jail? Most likely not, but we don't know the whole story and what your vendor knows.
    I'm not a lawyer, but I did stay at a Holiday Inn Express last night.......

  3. #3
    Join Date
    Oct 2014
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    7,404

    Default Re: What Do I Do About This Debt?!?!

    Quote Quoting 123wolfie321
    View Post
    Am I going to jail for this? I’m so scared and worried.
    Almost certainly not. The vendor would have to prove that you intended not to pay him when you entered into the contract, something that's going to be very hard to prove unless you said or did something at the time that indicated you never planned to pay up. It's not a crime to not pay your bills, even if the reason for the problem is just lousy financial choices. Since you are still in bankruptcy proceedings the vendor's efforts to collect violate the automatic stay that is imposed when you file the bankruptcy petition. you may wish to let him know you'll pursue sanctions for the violation if he doesn't knock it off. Once the debt is discharged, attempts to collect the debt will violate the discharge order, for which he can also be sanctioned. Basically, he can't do anything more to collect, no matter how mad he is about not getting paid. Nothing prevents you from paying him after the bankruptcy is over when you have the cash, and it might be worth considering paying him to repair the damage to your business reputation, but that's for you to decide once the bankruptcy is over.


  4. #4

    Default Re: What Do I Do About This Debt?!?!

    If they found out that this happened in the past with a couple vendors as well, could they say that I planned this?

  5. #5
    Join Date
    Mar 2013
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    17,129

    Default Re: What Do I Do About This Debt?!?!

    Quote Quoting 123wolfie321
    View Post
    If they found out that this happened in the past with a couple vendors as well, could they say that I planned this?
    They can SAY anything they want. It's proving it, with EVIDENCE, that counts.

    By the way, your vendor would have to file something with the bankruptcy court to challenge the discharge of the debt to him. If he hasn't done that, then he's just blowing hot air and you are likely safe to ignore him.

  6. #6

    Default Re: What Do I Do About This Debt?!?!

    Quote Quoting Taxing Matters
    View Post
    Almost certainly not. The vendor would have to prove that you intended not to pay him when you entered into the contract, something that's going to be very hard to prove unless you said or did something at the time that indicated you never planned to pay up. It's not a crime to not pay your bills, even if the reason for the problem is just lousy financial choices. Since you are still in bankruptcy proceedings the vendor's efforts to collect violate the automatic stay that is imposed when you file the bankruptcy petition. you may wish to let him know you'll pursue sanctions for the violation if he doesn't knock it off. Once the debt is discharged, attempts to collect the debt will violate the discharge order, for which he can also be sanctioned. Basically, he can't do anything more to collect, no matter how mad he is about not getting paid. Nothing prevents you from paying him after the bankruptcy is over when you have the cash, and it might be worth considering paying him to repair the damage to your business reputation, but that's for you to decide once the bankruptcy is over.

    The thing is they are saying Iím commuting fraud because after I received a couple payments from the client, I told them I hadnít received those payments to buy myself time to get the money together so I could pay them back. At one point I even admitted to them that the money was spent and I was making efforts to get the money back to pay them. They are saying that the client gave proof to them stating I was paid so by me using that excuse to buy time was to ďfraud themĒ.

    Obviously they know I was given payments from the client, but all my excuses I used weíre to buy time so I could get money together. Eventually I realized I wasnít keeping up with my debts and my spending habits werenít helping, so I went bankrupt. I just donít know what to do, and Iím freaked out at the thought of being jailed for something that was never my true intention

  7. #7
    Join Date
    Mar 2013
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    17,129

    Default Re: What Do I Do About This Debt?!?!

    Quote Quoting 123wolfie321
    View Post
    I just don’t know what to do,
    You don't have to do anything until and unless he files a challenge with the bankruptcy court. If he does that, then you talk to your bankruptcy attorney.

    Quote Quoting 123wolfie321
    View Post
    I’m freaked out at the thought of being jailed for something that was never my true intention
    You aren't going to jail so stop worrying about it.

    Now quit talking to that vendor. The more talking you do the more trouble you get.

  8. #8

    Default Re: What Do I Do About This Debt

    Quote Quoting adjusterjack
    View Post
    You don't have to do anything until and unless he files a challenge with the bankruptcy court. If he does that, then you talk to your bankruptcy attorney.

    You aren't going to jail so stop worrying about it.

    Now quit talking to that vendor. The more talking you do the more trouble you get.
    My due date for objections from creditors is 5/19.

    Once he can no longer object, what could they do next? Would they have to report me as criminal fraud?

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