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Collections Law/Corporation debt on personal credit report
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Question
Greetings from Oregon. My wife and I are in the process of cleaning up her credit report. My wife and I had a business (corporation) that failed in 2008. We had to liquidate all the assets and we lost our house. My wife has two "debts" in collections that are negatively listed on her personal credit report. These were not loans or credit cards, but services provided to the business before it went under. One was for equipment repair, the other for the alarm company wanting the remaining two years of service even though no services were rendered. Both total over $5000. Is it legal for them to report these on her personal credit report? Thank you for your time.
Ewan from Oregon.
Hello Ewan:
This is a very complicated question to answer and I cannot do it with certainty without reviewing ALL documents. So my comments will be general in nature and you will have to research a little by yourself or seek legal advice to be 100% certain.
They can report it - without question - if it is in HER name, she signed as a creditor guarantor, the business is a sole proprietorship, the business is a partnership, or she otherwise signed or entered into some type of contract in her name or with her social security number (as opposed to a federal identification number.)
They MAY be able to report it if the business was a corporation, LLC, or LLP but the entity was taxed as a sole proprietorship OR if proper licensing/incorporation documents were not filed properly with the state or registering entity, OR they otherwise feel they can break your corporate veil. This is usually done through poor record-keeping, co-mingling or funds, etc.
Often a creditor may try this to put the burden of proof onto the debtor in fighting it, so your record-keeping really becomes an issue. The two paragraphs above really are the key and you have to relate them to her situation. I cannot answer based on the information I have or in this forum. State laws may also play a part in this equation.
Good luck, I wish I could be more directly helpful but it's just too complicated to be able to say in a forum like this. Your best bet may be to fight it through traditional credit repair, then step it up if not successful.
Regan
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| Rating(1-10) | Knowledgeability = 10 | Clarity of Response = 10 | Politeness = 10 |
| Comment | Thank you for taking the time to answer my question. Even though your reply wasn't exactly what I was hoping to hear, it was very helpful. We are already in the process of seeking legal advice and looking into a professional credit repair service. We don't contest that the money is owed nor do we have a problem paying it off. I just think it is ridiculous for a business "bill" (not debt from a credit card or loan) should be listed on a personal credit report. At any rate, thanks again for your time. Sincerely, Ewan Wallis | ||
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Answers by Expert:
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
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