how to file a lien against a business

When businesses neglect to live up to their financial obligations, those who do business concern with them can get hurt.

Whether y'all are a vendor supplying the business with materials on credit, or a commercial real estate owner leasing the edifice inside which said business organization operates, Florida law provides you recourse to get your money back—or at least become some of it back.

The post-obit discussion explains how to file a lien confronting a concern.

What Is a Lien Against a Business?

When efforts to collect a beak from a business that owes you lot coin have been unsuccessful, you can place a lien on the assets of the business.

A lien on a business concern is a legal right of a creditor (someone the business owes money to) to obtain championship and possession of a business's assets. Said avails are then used as collateral to satisfy the debt.

Types of business assets discipline to a lien may include existent manor owned by the business, bank accounts, inventory, and equipment.

As a lienholder, once you gain title and possession of the debtor company'south property, yous have the potency to sell said belongings.

You would then use the proceeds of the auction to offset or satisfy the amount of the debt owed to y'all. However, before obtaining a lien on a business, yous must seek a judgment against the business organization in court.

Gather Documents to Bear witness the Debt

As a threshold matter, yous will need information most the debtor including its name and address of doing business. To obtain a courtroom society, you must offset prove that the business owes yous money and that the business has failed to pay you.

For example, if y'all are a food caterer and performed services as a contractor at the concern's part Christmas party, yous would want to evidence the bill for the costs and labor, as well every bit the receipts for whatsoever materials or ingredients used.

Similarly, if you have performed professional services for the business organization, your hourly billing statement should suffice as evidence of the unpaid debt.

File Your Merits in Court

Before you tin place a lien on business holding, you must first accept a courtroom order—a judgment directing the debtor to pay you what is owed. To obtain a judgment you get-go demand to file a complaint and pay any necessary filing fees. Include all documentation described above to prove the amount and validity of the debt.

After filing a claim with the court and submitting proof of the amounts owed to you, the business organization will typically file an answer with the court and serve y'all a re-create.

At this stage, the business organisation volition have an opportunity to fence the invalidity of the debt or prove that said debt has in fact been paid.

Documentation may include credit card statements or canceled checks. If the debtor business fails to demonstrate to the courtroom that the debt is invalid or previously paid, the courtroom will award you a judgment confronting the business to the full extent of the debt.

Enforcing the Judgment

In one case the court awards you a judgment against a business, you must next file the written order with the county clerk's office and then that the public is put on notice that you hold a lien against the business and its property. If the business has other creditors, your priority is generally adamant by who filed first.

This process is sometimes referred to as zipper. Hither, yous volition identify the concern'southward avails that will serve to satisfy the lien.

Assets typically include existent holding, equipment, accounts receivable, and inventory. Once the business organisation's avails take been "attached" to your courtroom gild, the business debtor volition be prohibited from selling or transferring said items of property.

Note that in some instances, the discover requirement varies by type of asset. For example, if the debtor business owns any real property, you will desire to file a observe in the clerk'due south role of the Florida canton in which said business concern is located.

For automobiles, you will want to file with the department of motor vehicles in whatever state the debtor business's vehicles are registered. If you seek accounts receivable, you volition want to send a copy of the written order to the debtor business'southward financial institutions.

Selling the Assets

One time the lien is in place, and the debtor business'due south assets are attached, you tin can and so do your legal right to seize and sell said avails. Because public policy seeks to discourage self-help, information technology is often the case that seizure and auction are washed through the sheriff's office via a public sale.

Here, the gain are applied to the outstanding debt. if the debt is non fully satisfied, your lien against the business can be placed confronting other avails.

Contact an Experienced Florida Creditors' Rights Attorney

Concern clients frequently inquire us how to file a lien against a business that owes them money. Considering the reply varies with the facts of your case, it is appropriate to speak to an chaser in your jurisdiction.

For more a decade, BrewerLong has advised creditors on a wide range of issues pertaining to business asset liens. Nosotros provide custom solutions based on your specific circumstances.

Contact united states of america today to schedule a consultation.

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Managing, directing and motivating a workforce is a cardinal gene in building a successful business concern. Kristi helps business leaders create and manage highly effective teams throughout every phase of their businesses. Kristi advises business leaders regarding all areas of employment law and enjoys profitable business leaders in preventing hereafter legal issues and overcoming unavoidable legal battles.