Is Your Business Being Sued for Debt?
Protect Your Business. Defend the Lawsuit. Explore Your Options.
When a business is sued over an unpaid invoice, commercial loan, vendor account, equipment agreement, lease obligation, or other alleged debt, the lawsuit can quickly become a serious financial problem.
At Texas Debt Law, we represent Texas businesses, business owners, and guarantors facing lawsuits involving commercial debts and breach-of-contract claims.
Whether your company disputes the amount owed, needs time to resolve the obligation, wants to negotiate a settlement, or you are personally being sued under a personal guarantee, our attorneys can evaluate the lawsuit and develop a strategy for defending and resolving the claim.
Sued for Business Debt? Talk to a Texas Debt Defense Attorney.
Call or Text: (214) 945-0000
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Business Debt Lawsuits We Defend
Business debt disputes can arise from almost any commercial relationship. We represent defendants in cases involving:
- Unpaid business invoices
- Vendor and supplier debts
- Business loans
- Business lines of credit
- Commercial credit cards
- Merchant cash advance disputes
- Equipment financing
- Equipment leases
- Commercial lease obligations
- Contractor and subcontractor payment disputes
- Professional service agreements
- Purchase agreements
- Promissory notes
- Accounts receivable disputes
- Open account claims
- Breach-of-contract lawsuits
- Personal guarantees
- Business debt purchased or assigned to collection companies
- Other commercial debt and contract claims
If your business has received a Citation and Petition, demand letter, or notice of a lawsuit, it is important to understand your options before a judgment is entered.
Sued Over an Unpaid Business Invoice?
A customer-vendor relationship can turn into litigation when one party claims invoices were not paid.
But an invoice alone does not necessarily resolve every issue in a lawsuit.
Depending on the circumstances, disputes may exist regarding:
- Whether the goods or services were actually provided
- Whether the work complied with the parties’ agreement
- The amount allegedly owed
- Credits or payments that were not properly applied
- Unauthorized charges, interest, or fees
- Whether the invoice accurately reflects the agreement
- Whether goods or services were defective or incomplete
- Whether the plaintiff performed its own contractual obligations
- Whether the person who allegedly entered the agreement had authority to bind the company
- Whether the plaintiff has sufficient evidence to establish its claim
Our attorneys review the contracts, invoices, payment history, communications, and lawsuit allegations to identify potential defenses and determine the appropriate strategy.
Breach of Contract Lawsuits Against Texas Businesses
Many business debt lawsuits are ultimately pleaded as breach-of-contract claims.
A plaintiff may allege that your company entered into an agreement, failed to perform its obligations, and caused the plaintiff financial damages.
Being accused of breaching a contract does not mean the plaintiff automatically wins.
Depending on the facts, potential issues can include:
- Whether an enforceable contract existed
- What the contract actually required
- Whether the plaintiff performed its own obligations
- Whether your business actually breached the agreement
- Whether the plaintiff can prove its claimed damages
- Whether contractual conditions were satisfied
- Whether payments or credits have been omitted
- Whether the plaintiff’s interpretation of the contract is correct
- Whether affirmative defenses, offsets, or counterclaims may exist
- Whether the claim was brought within the applicable limitations period
Texas generally provides a four-year limitations period for debt and many contract-related claims, although the applicable limitations period and accrual date depend on the particular claim and agreement.
Personal Guarantee Lawsuits
Is a Creditor Trying to Hold You Personally Responsible for Your Company’s Debt?
One of the biggest concerns for business owners occurs when a creditor sues both the company and the individual owner.
A corporation or LLC generally exists separately from its owners. However, lenders, landlords, vendors, equipment financing companies, and other creditors frequently require an owner to sign a personal guarantee.
If the business defaults, the creditor may attempt to collect directly from the guarantor.
Texas Debt Law represents business owners who have been sued under alleged personal guarantees.
We can review issues such as:
- Whether you actually signed the guarantee
- The exact scope of the guarantee
- Whether the guarantee covers the debt being claimed
- Whether liability is limited or unlimited
- Whether the creditor complied with contractual requirements
- Whether the amount demanded is accurate
- Whether amendments or modifications affected the guarantee
- Whether defenses available under the agreement or Texas law apply
- Whether a negotiated resolution can reduce the owner’s personal exposure
Do not assume that being named as a guarantor means you should simply agree to the amount demanded.
The guarantee and underlying transaction should be reviewed before deciding how to respond.
Business Loan and Line of Credit Lawsuits
Banks, online lenders, financing companies, and other commercial creditors may sue after a business defaults on a loan or line of credit.
These lawsuits may seek:
Principal + Interest + Late Charges + Contractual Fees + Attorney’s Fees + Court Costs
And when a personal guarantee exists, the lender may seek recovery against both the business and the guarantor.
We defend lawsuits involving:
- Term business loans
- Business lines of credit
- SBA-related loan obligations
- Commercial credit agreements
- Promissory notes
- Equipment financing
- Working-capital financing
- Other commercial lending arrangements
Our goal is to determine what the creditor can actually prove and develop the most effective strategy based on your company’s financial and legal circumstances.
Vendor and Supplier Lawsuits
Businesses frequently operate on trade credit.
A supplier may provide products, inventory, materials, or services and allow the business to pay later. When the relationship breaks down, the supplier may file suit for unpaid invoices or an alleged account balance.
These cases can involve significant disputes over:
- Purchase orders
- Delivery records
- Invoice amounts
- Returned merchandise
- Defective products
- Credits
- Partial payments
- Pricing disputes
- Contract terms
- Interest and late fees
- Attorney’s fees
We review the underlying transaction rather than simply accepting the amount stated in the lawsuit.
Commercial Lease and Equipment Debt
Business owners may also face lawsuits involving commercial leases or financed equipment.
Claims can involve:
- Unpaid commercial rent
- Remaining lease obligations
- Equipment leases
- Equipment financing
- Repossessed equipment
- Early termination charges
- Repair or damage charges
- Personal guarantees
- Attorney’s fees and collection costs
These claims can become substantial, particularly when a creditor seeks accelerated payments or damages extending beyond the date the business stopped operating.
Our attorneys can review the agreement and the damages being claimed to determine what defenses or settlement opportunities may exist.
What Happens If Your Business Ignores the Lawsuit?
Ignoring a business lawsuit can make the situation substantially worse.
If the defendant does not properly respond, the plaintiff may seek a default judgment.
Depending on the circumstances, a judgment creditor may then pursue post-judgment collection remedies against non-exempt assets, which can potentially include:
- Business bank accounts
- Accounts receivable
- Business equipment
- Other non-exempt business assets
- Property belonging to the judgment debtor
If you were also sued individually under a personal guarantee, a judgment could create additional personal exposure.
The earlier you address the lawsuit, the more options you may have.
Our Business Debt Defense Process
1. Review the Lawsuit
We examine the Petition, Citation, contracts, guarantees, invoices, account statements, payment history, and other relevant documents.
2. Protect Against a Default Judgment
When appropriate and within the scope of our representation, we prepare and file a response to the lawsuit so the plaintiff cannot simply obtain judgment because the defendant failed to answer.
3. Analyze the Plaintiff’s Claims
We evaluate what the creditor must prove and identify weaknesses, disputed amounts, contractual defenses, affirmative defenses, offsets, or other issues that may affect liability.
4. Develop a Resolution Strategy
Not every business debt lawsuit should be handled the same way.
Depending on the facts and the client’s objectives, the strategy may involve defending the claim, pursuing discovery, challenging damages, negotiating a settlement, seeking payment terms, or pursuing another appropriate resolution.
5. Negotiate When It Makes Business Sense
Litigation is ultimately a business decision.
When settlement is the best option, we can negotiate with the creditor or its attorneys in an effort to reduce the claim, establish payment terms, resolve personal guarantee exposure, and bring the litigation to an end.
Settlement of Business Debt Lawsuits
Sometimes the primary issue isn’t whether some money is owed.
The problem is that the business cannot pay the amount the creditor is demanding on the terms being demanded.
In those situations, litigation strategy can create an opportunity for negotiation.
Depending on the creditor, the strength of the case, available assets, and other circumstances, potential resolutions may include:
- Reduced lump-sum settlements
- Structured settlement payments
- Extended payment terms
- Reduction or waiver of certain interest or fees
- Resolution of both company and personal-guarantee claims
- Agreed dismissal after settlement
- Other negotiated resolutions
Every case is different, and no particular result can be guaranteed.
Why Hire Texas Debt Law for a Business Debt Lawsuit?
Texas Debt Law focuses on defending debt lawsuits. Our existing practice handles debt litigation throughout Texas, giving our attorneys experience dealing with creditors, collection attorneys, litigation procedures, and settlement negotiations.
Debt Defense Is What We Do
Business-Focused Strategy
For a business owner, winning isn’t always about litigating every possible issue.
The objective may be protecting cash flow, minimizing personal exposure, resolving the lawsuit quickly, reducing the amount owed, or preventing disruption to the business.
We approach the lawsuit with those objectives in mind.
We Understand Debt Litigation
Business debt lawsuits may look different from consumer credit-card cases, but many of the fundamental litigation issues are familiar:
Can the plaintiff prove the agreement?
Can it prove the amount owed?
Can it establish its damages?
Can it enforce the alleged personal guarantee?
Does the defendant have contractual or legal defenses?
Can the case be resolved on better terms?
Those are the questions we examine.
Who We Represent
Texas Debt Law can evaluate business debt lawsuits involving:
- LLCs
- Corporations
- Partnerships
- Small businesses
- Professional practices
- Contractors
- Restaurants
- Retail businesses
- Trucking and transportation companies
- Real estate businesses
- Medical and dental practices
- Service companies
- Franchise owners
- Business owners sued as personal guarantors
Whether the lawsuit seeks $20,000, $100,000, $500,000 or more, getting experienced counsel involved early can make a significant difference in how the dispute is handled.
Frequently Asked Questions
Can an LLC be sued for unpaid debt?
Yes. An LLC can be sued when a creditor alleges the company failed to pay a valid business obligation. Whether the creditor can recover depends on the underlying agreement, evidence, defenses, damages, and other facts of the case.
Can I personally be sued for my LLC’s debt?
Potentially. One common situation is where the owner signed a personal guarantee. Other legal theories may also be asserted depending on the circumstances. Being the owner of an LLC, standing alone, does not automatically make every company debt a personal obligation.
What happens if I signed a personal guarantee?
A creditor may attempt to enforce the guarantee against you personally if the business defaults. The language and enforceability of the particular guarantee should be reviewed before determining your potential liability.
Can you negotiate a business debt after a lawsuit has been filed?
Yes. Lawsuits are frequently resolved through negotiation. Depending on the circumstances, the parties may negotiate a reduced balance, lump-sum settlement, payment arrangement, or another resolution.
What if I agree that the business owes some money but disagree with the amount?
That is still a dispute worth evaluating. The amount claimed may involve contested invoices, interest, fees, credits, payments, contractual damages, or attorney’s fees.
My business closed. Do I still need to respond to the lawsuit?
Generally, simply closing a business does not make a pending lawsuit disappear. The consequences depend on the entity, its assets, the claims asserted, and whether anyone personally guaranteed the obligation.
Should I contact the creditor’s attorney myself?
You have the right to do so, but statements or agreements made during a dispute can affect your position. If the amount involved is significant or a lawsuit has already been filed, consider having an attorney evaluate the matter before negotiating.
Your Business Has Been Sued. Now You Need a Strategy.
A lawsuit does not mean the creditor automatically gets everything it is demanding.
Whether your company is facing an unpaid invoice lawsuit, vendor dispute, business loan lawsuit, breach-of-contract claim, commercial debt lawsuit, or personal guarantee claim, Texas Debt Law can evaluate the case and help determine the appropriate path forward.
Protect the Business. Protect Yourself. Resolve the Lawsuit.
Speak With a Texas Business Debt Defense Attorney
Call or Text Texas Debt Law: (214) 945-0000
Attorney Advertising. The information on this page is provided for general informational purposes and is not legal advice. Past results do not guarantee future outcomes. The outcome of any matter depends on its specific facts and circumstances.