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About Regan Shinski
Expertise
I can answer questions on collections, repossessions, bankruptcy, credit repair, credit counseling, FICO scores, credit planning, and the cause and effect of credit related decisions. I can also answer questions on collection settlements and preparing to sue your creditors for false debts and credit credit reporting.

Experience
Fifteen years ago I was financially devasted due to severe health issues. I filed bankruptcy, had a foreclosure, car repossession, tax lien, and ruined credit. I immersed myself in credit law. I settled dozens of accounts and had them removed to improve my credit. I personally sued four creditors and collection agencies and won cash settlements for their false reporting on my credit reports. Since then, I have completely recovered and have nearly $100,000 in revolving credit lines and perfect credit. I have owned a credit repair company for the past five years and have an additional three years of specific work in the collections and debt management industry. I am fully versed in the Fair Debt Collection Practices Acts (FDCPA), Fair Credit Reporting Act (FCRA), and have used them successfully in collection settlements and lawsuits for myself and others. I am also familiar with and abide by the Credit Repair Organizations Act (CROA). I have deleted or helped delete literally hundreds and hundreds of derogatory items from consumers' credit reports and helped negotiate many settlements with collection agencies and creditors. I have also advised people on bankruptcy at any stage. In the current credit market, I have successfully advised numerous people on how to obtain credit and how to negotiate for better terms.

Education/Credentials
BA University of Minnesota

You are here: Experts > Business > Corporate Law > Collections Law > Help! I've been served...

Collections Law - Help! I've been served...

Expert: Regan Shinski - 11/5/2009

Question
Hi--I hope someone can help! In 2006 I had a small business (an LLC) in Colorado with a business credit card. I was out of business in less than a year with $11,00 worth of CC debt. I was late one month and the payment nearly doubled the following month. I was unemployed and of course unable to pay that amount. I called and asked them to work with me, but was denied. Now 2 years down the road, I have been served. They served the summons to my home address, but I was at work so they had my husband sign for it. (Is that legal in CO?) I have spoken with their lawyer and I did admit to the debt. They sent me the following offer:
$11,000 principal, $4,000 interest to date and $500 in fees and costs PLUS interest at the rate of 23.99% per annum until payment in full. Wow! That's a lot of extra interest! I told them I could afford $250 in monthly payments but at that interest rate I see no light at the end of the tunnel! I have not returned their offer yet, but I have to file the answer to the summons tomorrow.
Another question--In the First Claim for Relief, in one paragraph it states "to the best of the knowledge and belief of the plaintiff, the defendant is/are not a corporation. I was incorporated as an LLC with the state of Colorado. Is a limited liability company a corporation? How does this affect me either way? I would love to talk to someone about my options.
Thanks for your time
TW

Answer
OK, so I don't quite get this. Did you sign as a personal guarantor on the credit card or was it strictly a business credit card? Colorado actually has more strict laws to protect member partners from personal liabililty in an LLC. See this link as an example:

http://ezinearticles.com/?Colorado-LLC---How-it-Protects-Colorado-Business-Owner...

So why exactly are you admitting this debt and not telling them the LLC has no assets and is dissolved? I'm not being sarcastic, honestly asking you and telling you it's something you need to look into.

Now if you signed or applied with a personal guarantee on the account, you are probably on the hook. Did you use an SSN on the application? That's usually a quick tell. Additionally, you MAY be on the hook if your record-keeping was bad. Did you file required LLC documents? File annual reports, hold shareholder/member partner meetings, have separate financial records, etc? If you didn't, it doesn't automatically mean you lose your protections in Colorado, but it hurts you.

If you fight it on this basis, be sure you are right because you would not be arguing the debt exists, just that you personally are not responsible for it. You have to be able to provide LLC docs.

If you think you are personally on the hook, you have limited options. Continued court delays, negotiated settlement, bankruptcy, and just accepting the judgement and fighting their collecting it are basically your options.

Another option is possible but tougher with the higher amount. you can try and find violations of federal law - probably FDCPA - on THEIR end. Then countersue to offset the balance or get better negotiating terms.

All of this is incredibly complicated. I want to make a specific disclaimer in this post - which I usually do not do:

Because it is such a complicated legal issue, I really think you need to hire a Colorado attorney. i believe my information is researched and valuable, but I easily could be mistaken since I am not a practicing Colorado attorney.

Good luck in whatever path you choose on this issue.

Regan

p.s. It looks like you were properly served by giving it to your husband at your home. Colorado law says the following on this issue:

Personal service shall be as follows:
Upon a natural person over the age of eighteen years by delivering a copy or copies thereof to the person, or by leaving a copy or copies thereof at the person’s usual place of abode, with any person over the age of eighteen years who is a member of the person’s family, or at the person’s usual place of business, with the person’s secretary, bookkeeper, manager, or chief clerk; or by delivering a copy to an agent authorized by appointment or by law to receive service of process.

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