Expert: Michelle Dunn - 10/22/2007

Question
QUESTION: In 2004 I started an S-Corp. My personal credit was in the low to mid 500's so I could not get an personal credit accounts.  After the business became 2 years old I began to apply for credit, mainly through Citibank. The business was able to acquire approx 100K of credit through about 10 accounts.  I did not personally guarantee the accounts as I would not have been approved if they even took a peak at my personal credit.  The business credit files with experian and dun & bradstreet were good at that time and that is why the credit was approved.  Since then we had some bank information stolen that was very disruptive to the business. It eventually caused us to shut down in the spring of this year.  

My question is, can they go after me personally for the debts?  The accounts are over 9 months past due and have already been passed around to multiple collectors. I can handle being hassled but I do not want them to go after me personally.  As I said, I did not personally guarantee the accounts, when the accounts began to get pretty far past due I asked a number of the creditors whether or not my social security number was in the file and they all said no. My ss# was on a couple applications but only for the purpose of following some sort of federal law. Again my personal credit was bad enough that there is no way I would have been approved if they used my ss# to approve it.  

If the credit was based soley on the corporate credit history and no personal guarantee was given can they go after me personally? I don't mind if there are judgements against the business, there are $0 in business assets that they could collect from. I was the only principal and my name was on the card but it was a corporate card.

As an aside, I have not seen any of these debts appear on my personal credit reports as of yet.

Thanks for the help.

ANSWER: Tim,
You can ask them for verification of the debt, if you ask for this within 30 days of receiving a first notice from them, they have 30 days by law to provide you with this verification. If they cannot provide you with verification that this is YOUR debt, they cannot continue to contact you. This means they must prove the debt is yours, it sounds like it is not yours, so they will not be able to send you anything showing that this debt is yours and then if they contact you again you can send a cease & desist or have an attorney send them a letter.


---------- FOLLOW-UP ----------

QUESTION: So would you suggest that I create a letter that I can use as a response to each of the creditors asking for proof that it is my debt and not the businesses?

or

Should I just ignore them altogether? Basically, should i let them know that the business is dead and that there are not any assets or just leave it alone.  

Answer
I would not suggest ignoring them, it will just get bigger and more out of control.  You can send a letter explaining the circumstances and be sure to send it certified or with a return receipt so you can be sure they received the letter.  Be very clear and concise and give them all details.