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Business Debt/who is responsible?
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Question
Thank you for your attention to this question. It has been over a year now that my husband entered into a business deal where he took control of a business where he was financing the buy out over a 10 year period. In the first month where he was in control of the company he obtained a company credit card where he guaranteed the debt. After 3 months of being in control of the company, we discovered that we had inherited a large sum of debt from the previous owner that we were not aware of. After talking to the previous owner he decided to nullify the contract and take the company back under his control. He asked for all company credit cards to be given to him and we, stupidly, gave him the card. In that 3 months that my husband was in control, he spent 6,000.00 in materials and expenses for the business. After we left the owner spent another 4,000.00 The owner tells us that we are responsible for the debt since the credit card is in our name, even though all of the monies were spent for business related expenses. Are we personally responsible to pay this debt or since the business went back into the original owner's hand is he responsible? Any help would be appreciated. Thanks.
Yes, if the card is in your name or the business name that you purchased, you are responsible. In this scenario, my best advice would be to get a lawyer, because this will be a hard one to deal with and you will need the help of an attorney and you may still end up paying that debt.
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Answers by Expert:
Michelle Dunn
Expertise
As one of the Top 5 Women in Collections, one of the Top 50 Collection Professionals, and winner of the Business Excellence award, I can answer any questions about debt, debt collection, improving business credit, creating a credit policy, enforcing a credit policy and collecting on past due accounts. I can also answer questions in regards to starting a debt collection agency since I have been a bill collector for over 24 years, started and ran my own collection agency for 8 years, and maintain my 12 year old Credit & Collections Association for members of the credit & debt collection industry. I am also the author of the popular and award winning book "Starting a Collection Agency, how to make money collecting money" now on it's 3rd edition. This book has won a the Writers Digest self published award as well as the New York Book Festival Award. I am a repeat contributor to the Wall Street Journal, and have been featured on NPR, CNN, as well as many other national radio and television programs. I have also been featured in national publications such as the Wall Street Journal, Forbes, Smart Money, MSNBC and much more. I have 17 published books to my name and am an accomplished speaker and consultant. I currently write 9 columns for newspapers, magazines and online portals worldwide.
Experience
I have over 24 years experience in debt collection, I started and ran my own collection agency for 8 years and I am the founder & owner of my Credit & Collections Association that I founded in 1998. www.credit-and-collections.com
Organizations
My Credit & Collections Association, I was also a member of the American Collectors Association and Plymouth Chamber of Commerce for 11 years. I am a member of many writing groups as well as my local Women Inspiring Women chapter. I am a member of Know More Media as an expert for their blog on business credit.
Publications
Business NH Magazine, Smart Money Magazine, MSNBC, CNN, Forbes.com, The Wall Street Journal, Home Business Magazine, Entrepreneur Magazine and website, many books, newspapers and television programs as well.
Education/Credentials
I have written 17 books in my collecting money series and one for Entrepreneur Press called the Ultimate Credit and Collections Handbook. My newest book is being published by John Wiley & Sons in May titled, The Guide to Getting Paid, how to weed out bad paying customers, collect on past due balances and avoid bad debt. This book is also being sold to many colleges as a text book.
Awards and Honors
My book Starting a Collection Agency, how to make money collecting money won an award from Writers Digest and the 2007 New York Book Festival in the "How to" category. I have won 2 awards from Dun & Bradstreet and Governor Jean Shaheen. I was nominated as one of the Top 5 Women in Collections twice as well as having been selected as one of Collection Advisor's Top 50 Collection Professionals by my peers.
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