Business Credit Card affecting Personal Credit Report

[creditcardcory]

I just received some info that I would like some confirmation on. My ss# was used for a business as a cosigner. The account is listed as joint. The business (a relative) did not pay I was notified of this 6 months after the fact. I paid it. Its on my personal credit report as paid charge off/collection.

I believe I already know the answer is Yes; however can this business account go on my personal report?

Cory

[c m chase]

Unfortunately.

If you sign w/ personal guarantee it can...no matter if it's sole or joint.

[c m chase]

With that said....you can always dispute with the bureaus as 'not mine' and see what happens.

[creditcardcory]

I have every month for 6 months and they have verified it every time.

[ADSOFT]

Hmm, Chase is a pretty reliable source yet there might be a way out on this on.

Don't know if the personal guaranttee can be used to over ride the stipulation on the FCRA that only consumer related purchases/credit can appear on your credit report.

You might want to check with calawyer on this, but the FCRA spicifically states that you personal credit report can only be used for consumer credit agreements. So you might be able to get out of it this way.

State that when you cosigned that is was a business venture and that therefore it does not meet the criteria that only consumer debts be reported on the FCRA. There is an FTC opinion letter that states that a credit report can only report consumer debt. I quickly read the FCRA and couldn't find the section where is specificlly states that only consumer related information can be on a credit report. .... somebody might be able to find this.

What I would do is read the FTC opion letter and find the one that states that only consumer debt can be reported and try to find where it corraborates that on the FCRA. ....it's in there somewhere, I remeber seeing it, ... it might be cross referenced on the FTC letter that I'm talking about.

[willingtocope]

If the letter you're referring to is the "Tatelbaum" letter and I interpret the gibberish correctly, this letter deals with "permissible purpose". Its basically stating that if an individual gives authorization to a lender to pull their consumer credit report in the process of personally guranting a business debt, then the pull is permissable. I would assume, therefore, that having the business debt appear on the consumer CR would also be permitted.

[songbirdnc]

If the letter you're referring to is the "Tatelbaum" letter and I interpret the gibberish correctly, this letter deals with "permissible purpose". Its basically stating that if an individual gives authorization to a lender to pull their consumer credit report in the process of personally guranting a business debt, then the pull is permissable. I would assume, therefore, that having the business debt appear on the consumer CR would also be permitted.

I can only offer this http://www.ftc.gov/os/statutes/fcra/tatelbaum.htm

I believe this may be the letter that willingtocope is referencing? It is some heavy reading and I find it hard to interpret due to the long explaintions and legalities.

Maybe someone here can interpret more. Also here is the link that I even found the Tatelbaum letter from in the first place http://www.ftc.gov/os/statutes/fcra/index.htm

[c m chase]

Very interesting opinion letter!! I will remember that one for my biz!

However....it does look to me like they're JUST talking about pp.

When you sign a personal guarantee, and your company defaults, you're turning that business transacton into a consumer transaction. That's what a personal guarantee IS...is that if something happens, you are personally responsible for it.

Now...wether you could convince a judge (or a CRA) otherwise, I don't know. When you sign that guarantee you're basically saying "I'll take it upon myself if need be." I would think that would mean take it upon yourself all the way.

Then again...you could try. The court system works in funny ways.

Again...very nice letter, AD.

[ADSOFT]

Very interesting opinion letter!! I will remember that one for my biz!

However....it does look to me like they're JUST talking about pp.

When you sign a personal guarantee, and your company defaults, you're turning that business transacton into a consumer transaction. That's what a personal guarantee IS...is that if something happens, you are personally responsible for it.

Now...wether you could convince a judge (or a CRA) otherwise, I don't know. When you sign that guarantee you're basically saying "I'll take it upon myself if need be." I would think that would mean take it upon yourself all the way.

Then again...you could try. The court system works in funny ways.

Again...very nice letter, AD.

Right-on, finally somebody with some business experience is on this board.

Chase, I used to be into this stuff, but I do remember that there is specific clause in the CRA that states only consumer transactions can be placed on your credit report. ... some one has to find that clause in the FCRA, yet I don't know what the legal ramifications are of a personal guarn. , or where it is defined. I guess we need a legal definition?

[admin]

Have you tried Method of Verification? (See the link at the top of the page).

[willingtocope]

Sorry, guys...been there, done that. Look at

http://www.ftc.gov/os/statutes/fcra/tatelbaum2.htm

it basically says that the "personal guarantee" of the business DOES grant PP for the creditor to look at your personal CR.

Furthermore...there are other FTC letters that opinion that once the business defaults, a personally guranteed business debt becomes a personal debt and can therefore appear on you personal CR as such. What is not entirely clear is whether the FDCPA then applies. There are also FTC letters that imply that a "business person" doesn't fit the "least sophisticated user" test of the FDCPA and that therefore they don't get that protection.

I've been all through this with a half dozen attornies in 3 different states. They all agreed that the only way we had to protect ourselves from personally guranteed business debt was to file personal BK.

[ADSOFT]

Sorry, guys...been there, done that. Look at

http://www.ftc.gov/os/statutes/fcra/tatelbaum2.htm

it basically says that the "personal guarantee" of the business DOES grant PP for the creditor to look at your personal CR.

Furthermore...there are other FTC letters that opinion that once the business defaults, a personally guranteed business debt becomes a personal debt and can therefore appear on you personal CR as such. What is not entirely clear is whether the FDCPA then applies. There are also FTC letters that imply that a "business person" doesn't fit the "least sophisticated user" test of the FDCPA and that therefore they don't get that protection.

I've been all through this with a half dozen attornies in 3 different states. They all agreed that the only way we had to protect ourselves from personally guranteed business debt was to file personal BK.

... Sounds like you know what you are talking about. I believe you.

Do have a sample copy of a letter/document that you sign when you give a Personal Guarantee? I would be interested in reading that.

[willingtocope]

Sorry, don't have anything handy, but if you look at "Company Credit Card" applications for card in your company's name, there's usually some language there that asks for the SS# of an officer and states that person hereby gurantees the debt.

We also had an actual line of credit with a bank, and included in the loan papers were words to that effect.

[ADSOFT]

Sorry, don't have anything handy, but if you look at "Company Credit Card" applications for card in your company's name, there's usually some language there that asks for the SS# of an officer and states that person hereby gurantees the debt.

We also had an actual line of credit with a bank, and included in the loan papers were words to that effect.

Thanks.

When I used to sell software turnkey systems (before computer prices came down and became dirt cheap), I worked with a sales company. The would ask for a personal guarantee for all people who were not in business for more than 2 years. I never saw the paper they signed since we only did the development, training and installation. But equipment leasing companies should have a copy of such a document.

I would like to get my hands on one, it would be interesting to see how they legally get around the criteria than only consumer debt can be place on your credit report.

I'm willing to bet that some of those Personal Guar. documents are not as binding as those who wrote them thought. There are a lot of ways to get around contracts, it's hard to cover every situation.

I'm sorta busy but searching "Personal Guarnatty Business Credit" should pop up some contracts (.. prob. sp Guar wrong). If anyone runs into one post it, I'll see if I can figure out how they tie it into the FCRA and maybe how to get around it. Just like consumer debts are not usually properly worded to give CA's the right to collect, some of these Per. Guar. might have a loop hole aroung them.

i.e

"....

Why should you care? In an assignment, the collection agency does not own the debt, and therefore you do not technically owe them any money. There is no way for a collection agency to prove that you owe them money because there is only an assignment of the debt and not a contract between you and the creditor.

One loophole: Some contracts have the wording "debtor agrees to be responsible for payment of this debt to creditor OR ITS ASSIGNS." This IS a contract between you and the debt collector as well as the creditor and if they can provide you with a copy of a contract that states this, you are pretty much stuck and need to negotiate. "

http://www.creditinfocenter.com/rebuild/debt_validation.shtml