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  1. #1

    Default Being Sued, Cannot Afford Legal Fees

    My question involves court procedures for the state of: Florida

    We're now on our second attorney with no end in sight to this mess; any advice would be appreciated.

    My wife and I own a Florida S Corp. Although very profitable in the past, it is now doing very little business (about $1800/month) and in a good month we make about $750 in wages from the corporation. We are barely surviving and are now actually receiving food stamps.

    In October 2011 a civil suit was filed against the corporation by a former vendor for $20,000.00 for unpaid invoices for merchandise we received. We did not pay the invoices because of faulty merchandise we received from this vendor. The vendor failed to honor their warranty, we refused to pay them, and they sued. Please note that the suit is against the corporation and does not name me or my wife individually.

    When the suit was filed, we immediately hired an attorney who said he could "make it all go away." What he made go away was our money -- although he did perform some filings and other services, he charged us far in excess of our ability to pay (we told him we were broke when we hired him) and when things dragged on for ten months, with no end in sight, he withdrew as counsel because we could no longer pay him.

    Plaintiff's counsel then filed a motion for summary judgment based on our lack of legal representation. We then banged out a deal with another attorney in order to force opposing counsel to withdraw that motion. Our new attorney is only charging us a few hundred dollars a month, but in our current state of finances that is money we really can no longer afford to spend.

    What is our best course of action to end this nightmare? Our current attorney has told us that if the other side wins, we could have future wages (from any source) garnished, lose our cars, personal property, etc., so we cannot afford to have a judgment placed against us; on the other hand, we can no longer afford to pay for legal representation -- we're at the point of having to decide whether to eat or pay our attorney. Having this hanging over our heads is having a huge impact on our health, both mental and physical.

    Other info: We are currently operating what's left of the business from our home. The business has some inventory, but not enough to cover a $20,000.00 judgment. We make a few hundred dollars a month from the business, and the rest goes out in bank fees, CPA fees, and other normal costs of doing business. If at all possible we would like to find a way to continue making the few hundred each month, but we are not sure what to do about that, either.

    As you can tell, we are desperate. Any advice anyone can give would be appreciated.

  2. #2
    Join Date
    Feb 2010
    Location
    CT & IL
    Posts
    5,273

    Default Re: Being Sued, Cannot Afford Legal Fees

    Really, 20K is not a huge sum of money. It looks like you did not return the stuff ... so I think that they have a good case against you.

    Your lawyers' fees will be more than 20K....

    I assume your current lawyer is saying settle the case?

  3. #3
    Join Date
    Feb 2011
    Location
    Arizona
    Posts
    387

    Default Re: Being Sued, Cannot Afford Legal Fees

    To be totally honest, it appears that you are at the point where you have a critical choice to make: pursue your case or attempt to settle with the other party. This would be something to discuss with your attorney, if you have not already done so. If the other party is willing to settle, it may be that you would be able to repay the amount at controversy in installments. If what you've said is correct, they have the resources to pursue the case, but you don't. The question you have to answer is this: Is winning this case worth our mental and physical well being?

  4. #4
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Being Sued, Cannot Afford Legal Fees

    If the corporation is no longer solvent, and the claim is being made solely against the corporation with no claim against you or your spouse, consider winding it down. Given that you're in litigation, you would have to be careful with any assets lest you be accused of misappropriating them in order to avoid paying creditors. I suggest consulting a business lawyer about the possibility.

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