QUESTION
What can a collection attorney do to collect on a $9500 personally guaranteed real estate investment default?
Asked on Nov 29th, 2020 on Breach of Contract - California
More details to this question:
I made an investment in a real estate deal with the CEO of an LLC for $25,000 in 2017. after the CEO gave me a written verbal and texted personal guarantee of my principal. The deal turned out to be a scam and he later confessed that he did not do his normal due diligence because the guy with the deal was a good friend. I managed to collect all but the last $10K by early 2019 but then he stopped paying me back. I offered him a settlement deal in September, 2020 to just pay me $550 a month for a year and I would eat the rest. He agreed by text. He sent me one payment for $500 in October but nothing in November. He has been ignoring my texts. I can't take him to court for the small amount but I do not know how to get him to honor his personal guarantee. He lives in Houston, TX and I live in Sacramento, CA. So I wanted to know if it would be possible to pursue legal collection for the full remaining balance of $9500 since he is not honoring the settlement.
1 ANSWER
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It depends upon the terms of the written guarantee and settlement agreement. My settlement agreements always include a clause stating that if the debtor defaults, then judgment may be entered for the remaining balance under the contract. But this may be possible without this clause. In addition, depending upon the terms, you might be able to collect costs, interest and attorney fees. I would sue him in Sacramento, and then have the judgment entered in Texas.
Answered on Nov 30th, 2020 at 6:19 AM