As a business owner, you know there are few things worse than being owed money by another company that won’t pay you. When efforts to collect what is owed you fail, one option you may want to consider is a lien on that company’s assets. If you’re successful in obtaining that, you have the right as a lien holder to sell those assets to recoup your money. Let’s discuss what the process involves.
First, you have to go to court to get a judgment against the company. You must show proof that the company didn’t pay a debt they owed you. For example, if you own a plumbing business and you did work for a company that didn’t pay you, you’d need to present the bills you submitted detailing labor, materials, plumbing fixtures and anything else for which you charged them.
The company is then required to explain to the court why the debt hasn’t been paid. The company owners might claim, for example, that the work wasn’t completed to their satisfaction. If the court determines that the company owes you the money, it will issue a judgment in your company’s favor.
You then need to file that judgment. In that filing, which is made public, you list the company’s assets and make a claim on them. This may include buildings, vehicles, bank accounts and other property and assets.
Once your lien is placed and the assets attached, you can legally seize them. Often, those who are owed money will sell those assets to recoup the debt. Sometimes, this is done through an auction or sheriff’s sale.
If you are having difficulty collecting a debt, it’s essential to explore all your options, including placing a lien. A North Carolina attorney experienced in handling breach of contract issues and other types of business disputes can review your options with you and help you proceed with the one you choose.