Nationwide Credit, Pheonix, also Georgia

[goglobal]

Hi everyone,

First time poster here!

My wife and I have 4 credit cards that are all overdue. My family is supported by our small family business, which was doing very well until current economy. No we have combined credit cards debts of about $150,000.

My 2 United Air Visa Cards (business and personal) have been given over to collection. My business Visa is being handled by Nationwide Credit with a Pheonix number. I have different people calling me at home and business. Sometimes they call 3 or 4 times in a row at the same number!!

The couple of times I did speak with them... the guys won't tell me their last name (seems like they use aliases) and wont even give me their address.

They have now called my former receptionist at her home (who was an additional user of card) but hasn't worked for me for over a year. They told her they will be holding HER responsible. They have gone as far as to call my mother in law at her home (who may have been an additional user some time back) They spoke to her very aggressively saying SHE owes them the money, which is ridiculous.

They have now called my accountant (I have no idea how they have found out her name) and told her that I have committed "fraud" in that I opened the credit card knowing I wouldn't be able to pay. They asked my accountant for inventory information on my Company, which she didn't provide. They also told my accountant that they would like to serve me with a subpoena and are looking for a place to serve it.

The big problem now is that I am in the business of luxury goods (which has suffered more than others in this economy) and the people they are calling (former receptionist, Mother in Law) are actually clients of mine now. They are completely ruining my reputation and causing me to loose clients.

I would like to settle the debt but have zero funds to work with right now.

Please give me advice if you have any experience with these kinds of cases.

[Robert Nashville/Savannah]

With all due respect to the posters here (who offer great advice), I would suggest that your best course of action would be to hire an attorney to represent you in this – a good attorney can give you advice about what you should/shouldn’t do; what you should/shouldn’t say to these people as well as “re-direct” a lot of the heat off of you and your family.

You have a very large debt, most of which seems to be either directly or indirectly business related which puts this in a very different ballpark than consumer debt and the FDCPA. Original creditors and/or their collectors have far more latitude to make your life miserable than does a typical collector attempting to collect a purely consumer debt. That is not to say that they can do “anything” but they have far less restrictions on their actions.

I think, were I you, I would write a simple, direct letter to your clients and/or anyone else currently or formerly connected with your business – be up front and explain to them what is happening and ask them to support you while you work through this process by refusing to discuss anything with these people (in other words, if they call, either don’t answer or politely hang up the moment they realize who they are talking with).

If you can generate some decent income or get your business back on track then you may be able to work through this; if not, then bankruptcy may be your only option...with this much debt on the line, I’ve no doubt they will sue you eventually (and let’s face it, they will almost certainly win).

I wish I had better news for you.

[goglobal]

Robert thanks for your advice. Couple of questions:

1. Why would collectors have more legal latitude when dealing with a business credit card?? I would assume they have to abide by same rules?? yes they can try and sue my business but besides that... I don't see the difference.

2. I've heard of lawyers who charge by the hour and others who charge as percentage of the savings they can negotiate. The collector is already offering 35K over 5 years on a 56K credit card balance. Cant I play hard ball with them w/o having to pay additional costs to lawyers??

I really appreciate your opinion.

[Robert Nashville/Savannah]

1. The answer to question one is that most of the Federal laws (predominately the "Fair Debt Collection Practices Act") only regulate third-party collectors (not original creditors) and apply only to consumer debt (not business debt). Business debt is simply a whole different animal than consumer debt -as to why Congress did it that way; I could only guess.

There are some states that extend protections for consumers to also regulate original creditors but very few. If there are any states that regulate collections with regards to business debt I'm not aware of them.

2. I strongly advise you to NOT use some "debt counselor" even if they claim they are attorneys...if you are going to get an attorney; get a real one in private practice.

One more thought...any agreement you get with a creditor should be IN WRITING and make sure you can afford the agreement...you won't be doing yourself any favors at all if you make a "great" agreement that you can't afford to keep up with.

Also, just because the FDCPA doesn't apply that does not mean you have to put up with harassment or that you shouldn't properly vet any collector...you have a basic right to know that a collector actually has the authority to act on behalf of the creditor, etc.

You need to stay in control...don't act out of fear or desperation.

[goglobal]

Thanks Robert. I will keep the members updated on my progress.