Small Business Debt Effect on My Credit Score

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Arya

Joined: 19 Aug 2009
Arya's page
Posts: 46

1190 Magic Points

Subject: Small Business Debt Effect on My Credit Score

Sun Sep 13, 2009 9:25 am

I have a small business, and unfortunately I have encountered debts that were sent to a collection agency. Can they go after my business and myself personally? I have explained my hardship with this economy, and would like to set up a payment plan to pay them off. Will my credit still be affected by this? And, if so, what is the upside on paying this debt?

Justin

Justin

Joined: 17 Jul 2006
Justin's page
Posts: 1240

28942 Magic Points

Wed Sep 16, 2009 11:22 am

Hi Arya,

If the creditor has turned over your debt to a CA, then it will be mentioned as a "charge-off" in your credit report. This is definitely not good for your credit history. The CA can use various means to get the debt from you, though they cannot violate the FDCPA. I think you can write a pay for delete letter to creditor, stating that you would like them to remove the "charge-off" from the credit report, since it affects your creditworthiness badly. Also tell them that you would like to pay the debt but with a new payment plan. The upside on paying this debt is that it will help you to improve your credit score.
Take a look at this link to find out the sample pay for deletion letter: http://www.creditmagic.org/repair/pay-for-delete.html
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All the Best Smile

Justin

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