Creditor is threatening to freeze my Business PayPal account after making a settlement offer

[DailyWebClicks]

I have recently offered around $16,000 from business PayPal to settle a debt with an unsecured creditor they asked for proof of this amount offered so I sent them statements of the business PayPal account including balance. The Creditor refused settlement offer saying it was not enough over a $24,000 debt and now threatening to freeze the account.

Seeing though now they are threatening further legal proceedings I don't believe this creditor is being very fair as it will cost them more to go through courts and I have offered everything the company has. I now want to protect this money from creditors and am considering to use business account assets to liquidate PTY LTD company and for legal representation if needed.

Is there a way I can move funds out of PayPal to personal bank account so as to use them for legal fees if needed?

 

[James Mahoney]

There seems to be a number of issues to work through here. Which entity owns the Paypal account (the Company or yourself as an individual)? What assets does the company hold currently and what is the value of those assets?

How much is owed to this particular creditor? How much is owed to other creditors?

There are ways to manage these sorts of situations, but there are significant risks associated. Insolvency can be an extremely technical area of law and I would suggest speaking to a lawyer prior to taking any further steps.

 

[DailyWebClicks]

Thank you James Mahoney for the quick reply

The PayPal account is a Business account and has merchant ID with the PTY LTD business attached to the PayPal account. The company itself holds no assets whatsoever other than the money in Business PayPal account. Company has stopped trading for over 3 months now.

$23,850 is currently owed to unsecured Creditor and there is no other outstanding amounts owing to any other creditors.

 

[James Mahoney]

It really depends on what you want to do next. What is the value of funds in the PayPal account?

From the creditor's position, freezing the account will be difficult unless there are legal proceedings on foot and there is a court order permitting the freeze. That being said, I am not familiar with PayPal's terms of use and there might be a dispute resolution clause preventing you from dealing with that money until the dispute is resolved.

I would still recommend speaking with a lawyer prior to taking any steps. Happy to help point you in the right direction if required.

 

[DailyWebClicks]

The amount of Paypal is $16,939.15 which was offered as settlement was not accepted by unsecured creditor. roughly $8,000 less of owed which was around $24,000. This unsecured creditor is taking the risk of spending more than that in legal fees to get that back full amount of $24,000 at my expense as the contract I have signed with them states I will pay for their legals fees.

I have talked to lawyer and have been told it is highly likely they will settle over this amount but I have been told many things and none so far have been true.