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We've sold material to a Louisiana company, and they defaulted on payment to us. How...

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kbrown64 | eNotes Newbie

Posted April 2, 2008 at 5:03 AM via web

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We've sold material to a Louisiana company, and they defaulted on payment to us. How does our company file a successful lien against our customer?

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santari | College Teacher | eNotes Employee

Posted April 3, 2008 at 4:10 AM (Answer #1)

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Your question would most likely be a statutory question; that is, the answer is likely found in the written laws of Louisiana. I am not familiar with the laws that would be implicated here, but some quick research shows that Louisiana, like many or all states, gives the vendor a preference over other creditors on the value of the property. In part, section 3227 of the Civil Code reads:

He who has sold to another any movable property, which is not paid for, has a preference on the price of his property, over the other creditors of the purchaser, whether the sale was made on a credit or without, if the property still remains in the possession of the purchaser.

So it would appear, by law, that you have a "lien" -- or right to the price of the property before any other creditors.

But having such a lien and getting it enforced are totally separate issues. In all likelihood, you would need to go through a court or administrative process to attempt to get your lien satisfied. This is something where you would really need to consult a lawyer familiar with local procedure, preferably one who specializes in the laws of commercial dealing.

Another thing to watch is whether the purchaser files for bankruptcy. In that case, you want to make sure the bankruptcy court is aware of your lien.

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prospero | College Teacher | (Level 2) Adjunct Educator

Posted April 3, 2008 at 4:11 AM (Answer #2)

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Lien rights typically arise from statutes of the state in which the lien is sought to be filed.  There are a few preliminary questions that might help better get you the answer you are looking for.

1. What state are you in?

2. What kind of materials did you sell?

3. Is there a written contract, or bill of sale?

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