Victor Look, Esq. is a partner at Look Law. In this video he discusses methods of collecting payment from overdue accounts.
- Personal guarantee agreement
- Record a UCC-1
- Litigate for breach of contract
As we all know in the current economic environment, there are many businesses that are falling behind under bills and some businesses that have just completely ignored their bills altogether. Typically, we have an agreement between two companies. One, to provide services, the other one, to pay. Now, if one company provided services together, the other company fails to pay, what’s your recourse. Because the agreement is between two companies so there’s no personal liability.
The first thing that I advised my clients to do is to get the CFO or the CEO of that other company to sign a personal guarantee agreement just to get involved rolling that way. That way, the company that is in default is now could be hold in to the other company for personal assets and this is something that we can go after if we have to litigate.
The second thing that we can do is file what is called the UCC1 with the Secretary of State and all that really does is gives the state notice that the company has a claim to some of their assets.