Business Credit Cards?

Question

I was sent two letters from a collection agency telling me I owe BOA money. I am already paying BOA off so I can't possibly owe anymore. I sent two registered letters asking for more information about the debt and they didn't answer either one.

This is a debt I incurred when I owned a sole proprietorship that failed a couple of years ago. Do consumer debt laws apply to business credit cards even though I am personally responsible? Do they have to tell me where this debt was incurred even if it was a business debt?

Thanks in advance,

Mikki

Answer 1

Consumer protection laws, such as the Fair Debt Collection Practices Act, only apply to consumer debt, not business debt.

If the debt was incurred by the business, and you did not personally guarantee repayment, then you aren't personally liable.  With the business, did you properly wind it down and file dissolution papers with the state?

I would contact BOA and tell them that the debt belonged to the business.

Answer 2

If you were a sole proprietorship, more than likely, your application and account terms specifically stated that both you and the business were jointly liable for all charges - this would be especially true if they used your credit when you applied.

While they may not be successful in getting it, this is even true of non-sole proprietorships. Even in cases where a partner opens up an account, it is possible that other partners would be held liable for that debt, even if they weren't aware of it - as again, today most account terms state that the business and the individuals are jointly liable.

Depending upon how old these accounts are however, I would be VERY careful about any discussions you have with them - in other words, don't offer any additional information. If the debt isn't on your personal credit report, I would make the burden of collecting it fall upon them entirely.