Expert: Christine Janklow - 2/25/2010

Question
In 2008, I was the 100% member of a Colorado LLC. The company was no longer profitable and had to close. No bankruptcy took place. All bills and obligations were paid in full except for a 5 year unsecured lease on a copy machine. After trying to negotiate a settlement for the last 2 years, I am now receiving threatening letters saying that the lawyers have checked into my personal finances and see that I can clearly pay the debt. This is untrue. I have no resources other than a small checking account. The debt was NEVER secured by a personal guarantee and I NEVER gave my social security number. I still have the original lease papers and the debt was solely a LLC debt, not a personal debt. Is there any way they can put a lien on my house, sue me personally, or garnish my checking account as they are threatening? The only credit reporting agency that they are saying they will report to is Dun and Bradstreet. I do not ever plan to reopen the business, so I don't really care what Dun %26 Bradstreet credit is. My personal credit is 800+. Thank you for your consideration.

Answer
Kristi:
Thank you for your question. I do understand the nature of your concerns. It appears that collection of the debt has fallen into the hands of an aggressive collector perhaps even a law firm. Obviously the leasing company is trying to collect all it can to make up for losses. That said, dependent or not if you have continued paying this debt the creditor has 6 years from the date of last payment to collect what is owed under the Statute of Limitation. If you stand behind the fact that you did not personally guarantee, you may not want to respond or dispute anything, just let time pass and see if they pursue you. Either way, if they are going to seek monies owed legally, they must do so in your home state and usually the firm contacting you be located in that state as well. Based on my experience this is a typical tactic to get some payment as people are usually intimidated by this type of collections. It might very well be in your best interest to consult an attorney regarding the lease contract and your rights after dissolution, because with the LLC gone, there is no more corporate veil to protect you. Lastly, don't be more concerned about implications to your credit, more than you are about paying a debt that may not be your liability. If it ever does report to you, dispute it with the credit reporting bureaus to have it removed.

Best of luck.

Respectfully,
Christine Janklow