Square loan if I have a pending legal case?

[atomicautosalom]

Does anyone happen to know if a Square Loan would be denied if I have a pending legal case involving my business? 

Here's are facts in the case:

- I have a client I had to take out a mechanics lien on for nonpayment of services. So it's a civil matter.

- The client has filed through the replevin process and I expect we'll be given a court date sometime soon to settle the matter. While I'm essentially listed as a defendant in that regard, eventho I am technically the plaintiff since I am holding the mechanics lien

- no judgement has been made obviously 

- this has been filed publicly thought the state's circuit court listing system.

Just want to know what to expect or if this would hold up the process.

[Donnie-M]

@atomicautosalom If you are the holder of the lien and owed money, that wouldn't be anything that would be a red flag imo.  That being said, mechanics liens are funny since they don't require any type of judgment to get.  The replevin process won't usually give you anything except to say if the lien is valid, since the person is trying to say you had no right to the mechanics lien (unless you still have the property etc.).

That being said, I would personally probably follow up with a small claims court to get a judgment and then collect with a judgment lien.  I am not an attorney and these laws differ wildly state to state.  So I don't necessarily think this would disallow you for a loan.  I think you classify this as an account receivable.  You aren't involved in a lawsuit against you, because at worst case, your lien gets invalidated.  Again, consult with an attorney is the best advice.

[atomicautosalom]

Well I still have it the property tho. I can't sell it at auction until a judgement in made. Why would still having the property make it different?

[Donnie-M]

If the court somehow ruled your mechanic's lien isn't valid, you would technically have to return the property to the person and pursue your claim another way (sue them).  In that situation you have some liability to return the actual property etc. and then you get into..hey he broke it while he had it..yada yada yada.  That is extreme of course, but I like to pay attention to WCS even if it is the least likely scenario.

If you just had a lien on a piece of property then the only outcome would be extinguishing the lien and no property is involved.  I was thinking more along the lines of you sold it or something.  But same as others chimed in, I don't think this does much.  I think they worry more about you filing bankruptcy a day after or something like that.

[Twpchair]

I wouldn't think it would 🤔 like the other one posted. I'm not at the store right now to look over my previous loans agreement. This civil not criminal, your not filing bankruptcy etc. I'll look at my loan paper's but I don't remember this in any of paper's. Good luck and I will let you know when I read through them. 

[atomicautosalom]

Sounds good. Thank you for your insight. I'll be waiting to hear back.