Expert: Christine Janklow - 10/27/2008

Question
I am very distraught with Advanta Business cards.  As of a few months ago
they raised my interest rate from 7.99% to 21%.  Their reasoning is because
there  are high balances on my revolving debt.  However, this is a business
card and not a personal cc.  In any case I couldn't get them to reduce the rate
and now the payments are horrendous.  I closed the account and am still
making the astronomical payments but I am reaching a point where it is just
too much.  They will not work with me at all.  I am in GREAT standing w/ all
my cc so I don't understand why they are being so difficult.  I understand
there is a credit crunch but I feel I am being bullied by a BIG corporation.  Will
I be personally liable for the debt for this llc that I have already dissolved?  It
is a single member llc.

Answer
Marianne:
Thank you for your question. I feel your pain and frustration. Unfortunately, the credit card company's (especially those starting with the letter "A") seem to be the most difficult to work with. Fine while your in good standing, but the minute you need some relief, there are no allies. If I understood the essence of our question, will you be liable for the debt (without the benefit of seeing the application or agreement) my answer is likely "yes". The credit card companies are very clever in getting personal guarantees from small business owners right up front. The language is often hidden in the multiple pages of contracts they send. Furthermore, by dissolving your LLC, you may have removed the small but protective statutes that may have given barrier regarding creditors. So, what are your options now? Well the easy and creditor friendly answer is continue to pay, but you have already expressed difficulty in doing so. If you owe more than $10K in debt you may be eligible for debt settlement, but I would not seek help with a consumer company.
A hint is you can get them to bend, but you must be in arrears on this account before they will offer flexibility. Hardship programs are becoming much more available, but creditors won't just offer them to everyone who stays current. If you are really struggling, don't be afraid to miss a payment then give them a call and see what they will do then. If need be miss a couple, because even though they will begin to collect, it could save you thousands. Lastly, if you simply can't or don't want to deal with creditors yourself, you might look to have a commercial debt settlement firm settle this for less. Credit counseling won't likely accept this as it was your LLC's card. Remember, the goal here is getting rid of the debt, not trying to maintain a perfect credit score if you simply can't. You can repair after the debts are gone. I hope this was helpful. If so, please take a moment to provide a positive rating, so others with these issues can benefit from this answer.

Respectfully,
Christine Janklow