Expert: Christine Janklow - 3/31/2010

Question
My husband is a sole proprietor.

9 days ago I received a phone call at home from a collection agency.  They left a message saying "This is ___ from ___ and we have an affidavit to file against (our names no mention of company name) for unpaid invoices.

I called for the information.  I have no recollection of the debt they say I owe and I specifically asked them to mail me the information.  They said they couldn't do that.  I also learned that earlier that day they had disclosed all the information to my son on his cell phone which is not in our name and we have nothing to do with.

They called again 4 days ago offering a settlement.  I again asked them to mail the information and they said no.

Today they called at 11:30 and said they were going to file against us at 1.  I again asked for the information to be mailed and was told I would get nothing in the mail.

While I had dealt with the original company in the past I have no recollection of this debt.  I received no demand letter.  Also the debt is just under 4 years old.

Because this is business and not consumer debt do we have any rights?

Answer
Dear Beth:
Thank you for your question. This appears to be an unfortunate situation and perhaps erroneous. You are being collected upon for a debt that may or may not be yours (or your business) and someone is aggressively eluding to the fact they will pursue this for payment. First of all any legitimate collection agency must verify who they are, the purpose for which they are calling you (an attempt to collect a debt) and let you know what the details of that is. Then you will have the option to discuss payment, disputes, etc. If you have verbally disputed this, you also should do so in writing and ask for a "verification" of debt in writing from them. They must upon receipt (should send certified return receipt) stop collections for 30 days and answer you.
It is the end of the month,so dubious collection agencies might take to "threats" to prompt payment and make quotas. Don't fall for this. Don't answer the phone or disclose any more information, nor make any promise to pay unless you get something in writing that says you truly owe this debt. You might want to call the original creditor and ask if you have any outstanding obligations with them. Also, the debt may be due to expire for collections in your state of residence and this is a last ditch effort to collect. You can verify what the statute of collections is by visiting http://www.fair-debt-collection.com/SOL-by-State.html#33
Lastly, if this agency is not a law firm, they can not sue you. You can file a complaint against them by contacting your states attorney general office for more information. As for your rights, you are a sole proprietor therefore considered a consumer as there may be personal guarantees in play.

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Respectfully,

Christine Janklow