Interest rate on old debt, need advice.

[ericbsw]

Hi, I’m a small business owner in Seattle area and I need advice.

10 years ago, one of Chinese business man invest $100,000 into my small business, but he changed his mind soon , ask for his money back. The business was in difficult situation and I agreed pay him back slowly. I paid $80000 to him in total and keep paying every month. But last week he hire a collector contact me, collector said that I need pay him 18% interest annually, that my small business can’t afford.

How can I handle this issue? If they sue me to court, what result can I expect?

My English is not good because it’s my second language.

Thank you.

ericbsw

[Fulcrum]

Bully tactic.

You will need to get your own lawyer for this one. Whatever paperwork regarding the initial outlay of funds (was it a loan or an equity investment), as well has your payback/buyback agreement, will be absolutely required.

[Freelancier]

He cannot just assign an interest rate that wasn't agreed to (either when the transaction was first created or at some subsequent point if there's a renegotiation of terms); that's why people who put 18% late-fee interest on their invoices after the transaction is done and without the customer's signature when the transaction was done are going to have a hard time collecting those late fees.

So... go back to the terms of the agreement that you negotiated when you took the money and any terms you subsequently in writing agreed to and those govern the transaction going forward until you renegotiate (again).

As for the collector, if they call you, tell them very clearly they are not to contact you again except through the US Mail. If they ignore that, they violate the law and you can bring suit against the collector as well for harassment.

[ericbsw]

Thank you for very such good advises. I have more clear ideas hoe to handle this.

It's my first time try to get help on small business forum, I'm glad I tried.

Thank you.