Need Advise... Removing a JDB Collection from Credit Reports

[LaneBlane]

I've been attempting to have a collection removed from my credit reports that's for more than $7,000.  It involves a JDB who filed in court against me several years ago on a Kabbage business loan.  I filed an MTC that was granted by the Court and then filed a demand for arbitration with JAMS.  JAMS eventually closed the case for non-payment.  Nearly two years later the Court dismissed the case for failure to prosecute.  The dismissal was without prejudice.  (The Court Order doesn't state with or without.  It just says dismissed.)

I recently sent a copy of the Court Order to the CRAs with a letter asking for the removal of the collection.  Experian has already finished their investigation with no changes.

One of my earliest disputes for this collection was the fact that a commercial loan shouldn't be reported to my personal credit.  I've thought about making this same dispute again and providing some additional details to support my request.  Another issue is the fact that the bill of sale the JDB produced in court shows an account number that isn't a match.  I don't know if this would help me at all because it seems as though the CRAs don't require creditors to prove anything, they just have to confirm what they're reporting is true, no matter what kind of documentation is sent in.

Is there a way a consumer can put a CRA in a position where they have to require evidence from a JDB to prove ownership of an account?

Thanks!

[Clydesmom]

55 minutes ago, LaneBlane said:

I recently sent a copy of the Court Order to the CRAs with a letter asking for the removal of the collection. 

Failure to pursue the case is not grounds for removal.  Had the court ruled on the merits that would be.

56 minutes ago, LaneBlane said:

One of my earliest disputes for this collection was the fact that a commercial loan shouldn't be reported to my personal credit. 

If there is a personal guarantee they can report.

56 minutes ago, LaneBlane said:

Another issue is the fact that the bill of sale the JDB produced in court shows an account number that isn't a match.  I don't know if this would help me at all

It won't help.  The assignee whether a CA or JDB has to give the account it's own number.  They cannot use the original creditor's account number.

57 minutes ago, LaneBlane said:

Is there a way a consumer can put a CRA in a position where they have to require evidence from a JDB to prove ownership of an account?

No.  The process isn't there to benefit consumers.  It is for creditors since they pay the bureaus for membership.  They are only required to prove ownership of the account in litigation or arbitration.

[LaneBlane]

Thanks for the reply, @Clydesmom.

I sent the Court Order to the CRAs hoping the line item may drop from one of reports if the JDB failed to respond.  No such luck yet.  I'm still waiting to hear from TransUnion and Equifax.   I'm expecting the same outcome.

The arbitration provision includes this language:

1. If either party fails to submit to arbitration following a proper demand to do so, that party will bear the costs and expenses, including reasonable attorneys’ fees, incurred by the party compelling arbitration.
    
2. No matter which party initiates the arbitration, we will advance or reimburse filing fees and other costs or fees of arbitration.

My plan is to take the JDB to small claims next year, after the SOL tolls, for my JAMS filing fee of around $650.  (This wasn't a consumer case, so the filing fee was much higher).   I invoiced the JDB years ago for reimbursement with no response.  Until the SOL is up, I'll leave things well enough alone.

 

1 hour ago, Clydesmom said:

It won't help.  The assignee whether a CA or JDB has to give the account it's own number.  They cannot use the original creditor's account number.

I meant the account number on the Bill of Sale from the OC and the account number on the contracts they provided in court. 

[BV80]

16 hours ago, LaneBlane said:

I meant the account number on the Bill of Sale from the OC and the account number on the contracts they provided in court. 

Well, I don’t know about business loans, but when a credit card account is charged off, some banks will give it a new account number because it has become a non-performing account that is “no longer on the books” vs. an active, open account.

[LaneBlane]

On 9/27/2021 at 6:37 AM, BV80 said:

Well, I don’t know about business loans, but when a credit card account is charged off, some banks will give it a new account number because it has become a non-performing account that is “no longer on the books” vs. an active, open account.

When a JDB provides a Bill of Sale that shows transfer of ownership to them from an OC, it usually has a one-page attachment with a single line of information from the long list of accounts that were part of the sale.  This information usually includes the account holders name, amount, and the account number.

If the account number is changed, and the new account number is reflected in the chain of ownership documents, a consumer (or commercial borrower) can say...  the JDB's documents show they purchased account number 12345.  My account number is 13579.

[BV80]

4 minutes ago, LaneBlane said:

When a JDB provides a Bill of Sale that shows transfer of ownership to them from an OC, it usually has a one-page attachment with a single line of information from the long list of accounts that were part of the sale.  This information usually includes the account holders name, amount, and the account number.

If the account number is changed, and the new account number is reflected in the chain of ownership documents, a consumer (or commercial borrower) can say...  the JDB's documents show they purchased account number 12345.  My account number is 13579.

You’d need to look at either the charge-off statement or statements that are sent after charge-off.   But, again, I don’t know how much it means to the CRAs.  All they know, is that there was no court ruling that says that you don’t owe the money.  

Have you disputed the TL directly with the JDB?

[LaneBlane]

1 hour ago, BV80 said:

Have you disputed the TL directly with the JDB?

I haven't disputed it directly with the JDB.  Because the SOL isn't up for another year, I've avoided dealing with them directly.

The odds that the JDB would ever decide to re-file in court seems slim. The first go-around the court granted my MTC and the JDB wouldn't pay up when the arbitrator's retainer was owed.

If I did contact the JDB directly, can you give me a general outline of what to say?

Thanks for your help!

[BV80]

2 hours ago, LaneBlane said:

I haven't disputed it directly with the JDB.  Because the SOL isn't up for another year, I've avoided dealing with them directly.

The odds that the JDB would ever decide to re-file in court seems slim. The first go-around the court granted my MTC and the JDB wouldn't pay up when the arbitrator's retainer was owed.

If I did contact the JDB directly, can you give me a general outline of what to say?

Thanks for your help!

I could not hazard a guess as to how to deal with a business debt.  I agree that it is slim that they will refile.  However, if they did, you could bring up the court order to arbitrate, that it was disobeyed, and request sanctions.

Is the TL being reported correctly?  Whether it is or not, I might contact a consumer attorney and ask if a business loan should be reported as personal credit.  If it’s not, that might be how you could bring up arbitration as a negotiating tool to get the TL removed.

[LaneBlane]

On 10/1/2021 at 3:29 PM, BV80 said:

Is the TL being reported correctly?

It isn't being reported correctly.  In their Summons from 2017, the JDB claimed around $6,500 was owed on a total of 10 merchant loan agreements.  After going through my records, I determined a small balance of a few hundred dollars should have remained on the last loan.  Their accounting lumped all the loans together and failed to itemize how much they claimed was owed on each one.  Payments were missing from their running statement.  The calculation of interest and penalties was also way, way off.

The transfer of ownership documents are also an issue.  There's a Bill of Sale and Assignment from the OC that includes an exhibit that reflects my name, business name, OC account number, and JDB account number.  The OC account number only appears on the last two loan agreements which involved a third-party lender that wasn't involved in the other transactions.  None of the other agreements include this account number.  Also, I received a copy of the Purchase Agreement referenced in the Bill of Sale and Assignment.  This is an agreement to transfer ownership between the third party lender and the OC.  It outlines the terms of the agreement.  However, it fails to state whether these terms were met and ownership was actually transferred.

I'll do some more research into reporting business loans to a consumer credit report if a personal guarantee is involved.  This approach may have some promise.

As always, BV80, thanks for your help!

 

 

 

[BV80]

2 minutes ago, LaneBlane said:

It isn't being reported correctly.  In their Summons from 2017, the JDB claimed around $6,500 was owed on a total of 10 merchant loan agreements.  After going through my records, I determined a small balance of a few hundred dollars should have remained on the last loan.  Their accounting lumped all the loans together and failed to itemize how much they claimed was owed on each one.  Payments were missing from their running statement.  The calculation of interest and penalties was also way, way off.

The transfer of ownership documents are also an issue.  There's a Bill of Sale and Assignment from the OC that includes an exhibit that reflects my name, business name, OC account number, and JDB account number.  The OC account number only appears on the last two loan agreements which involved a third-party lender that wasn't involved in the other transactions.  None of the other agreements include this account number.  Also, I received a copy of the Purchase Agreement referenced in the Bill of Sale and Assignment.  This is an agreement to transfer ownership between the third party lender and the OC.  It outlines the terms of the agreement.  However, it fails to state whether these terms were met and ownership was actually transferred.

I'll do some more research into reporting business loans to a consumer credit report if a personal guarantee is involved.  This approach may have some promise.

As always, BV80, thanks for your help!

 

 

 

I would definitely rely on the terms and conditions to determine if it was followed.  They can’t get out of the very T & C’s they created.

[LaneBlane]

34 minutes ago, BV80 said:

I would definitely rely on the terms and conditions to determine if it was followed.  They can’t get out of the very T & C’s they created.

Because I'm a sole proprietor, and there was a personal guarantee, the collection can be reported to the consumer CRAs.   I was expecting this.

Do you know if it's possible for a JDB to request and receive additional documentation from an OC on an account they purchased five years ago?   I'm wondering if the JDB could obtain a document that shows the purchase/sale between the third party lender and Kabbage (the OC) was finalized.  What do you think?

[BV80]

3 minutes ago, LaneBlane said:

Because I'm a sole proprietor, and there was a personal guarantee, the collection can be reported to the consumer CRAs.   I was expecting this.

Do you know if it's possible for a JDB to request and receive additional documentation from an OC on an account they purchased five years ago?   I'm wondering if the JDB could obtain a document that shows the purchase/sale between the third party lender and Kabbage (the OC) was finalized).  What do you think?

I hate that it can be posted to your personal credit report.

Whether or not the JDB can get additional documentation at this point is anybody’s guess.  There’s just no way of knowing right now how much information the JDB has and how much the creditor kept in its records. I think I read one time that they have so long to get extra documentation without having to pay for it.  After that, they have to pay.  But I can’t remember where I read it.  

[LaneBlane]

59 minutes ago, BV80 said:

I hate that it can be posted to your personal credit report.

Whether or not the JDB can get additional documentation at this point is anybody’s guess.  There’s just no way of knowing right now how much information the JDB has and how much the creditor kept in its records. I think I read one time that they have so long to get extra documentation without having to pay for it.  After that, they have to pay.  But I can’t remember where I read it.  

I'll do a search online to see if I can find any documents related to that purchase and sale agreement.

One more question...   In a case such as mine where 10 individual loan agreements are involved, can a JDB lump everything together and claim a balance of $X is owed on the 10 agreements combined?   Whether in court or arbitration, wouldn't they have to provide an itemization for each separate agreement?

 

 

 

[BV80]

13 minutes ago, LaneBlane said:

One more question...   In a case such as mine where 10 individual loan agreements are involved, can a JDB lump everything together and claim a balance of $X is owed on the 10 agreements combined?   Whether in court or arbitration, wouldn't they have to provide an itemization for each separate agreement?

 

Wow!   I’m not positive, but if this were in court, I would think that if they’re claiming one balance but each agreement specifies its own separate balance, then they would have to show how they arrived at one lump balance.  In other words, “Here’s the balance owed on Agreement #1.  Here’s the balance owed on Agreement #2” and so forth.  And I would think they would have to show documentation to support each separate balance.

But this is not in court and is a toughie.  I hope you can get some advice from an attorney.  

[HueyPilot]

If your business was an LLC you might have some recourse. Sole Proprietorship leaves you pretty exposed. At this point waiting out the SOL until it tolls appears your best option. Really sucks if you are trying to buy something. 

https://www.upcounsel.com/can-a-llc-be-sued

Your claim sounds like a different issue however the above is a good read and may give you some ideas to pursue.

[LaneBlane]

23 hours ago, HueyPilot said:

If your business was an LLC you might have some recourse. Sole Proprietorship leaves you pretty exposed. At this point waiting out the SOL until it tolls appears your best option. Really sucks if you are trying to buy something. 

Thanks for your feedback.

I have a sole proprietorship, so it appears things are more likely to be attached to my personal credit.   I need to look into the benefits of having an LLC.  It may be a good idea.

This collection tradeline is five years old, so it's not affecting my credit nearly as much as it used to.