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Subject: Special situation, please help!
Posted on Tue Nov 10, 2009 8:07 pm  

Hi Everyone,
I have a debt situation that I need advice on, and obtain some knowledge before I make a decision on what to do.
I reside in N.Y., and I filed successfully for chapter 7 before the deadline in 2005. I still had a small business back then (corporation), and it wasn’t doing well at all. The neighborhood was horrible for my business and under the circumstances I was in, I had no choice really. It was either there or nowhere. I forced the issue and shouldn’t have. I had a couple of credit cards that I opened under the business name. It was not filed in my bankruptcy, but it wasn’t paid either. Debt collectors called me a few times back in 2006-2007 about it and made some threats but nothing happened really. Now it’s towards the end of 2009 and I have another debt collector sending mail and calling/threaten about the debt and saying that they may restrain my bank account. It’s around a 5K debt.
Extra info: I have been on unemployment the whole year already. I was laid off 12/31/2008 and have not had income other than unemployment benefits, (direct deposit). I closed the corporation not making any $. Corporation was closed around the end of 2007. This debt is a credit card. I have not spoken to any collectors since roughly 2007. I just let it go to voicemail.
Now my questions are:
1- [bold]Can they chase me for a debt that was under the corporate name (credit card)?[/bold]
2- IF YES, let’s say I had only a couple of grand in the bank account, and I’m still getting unemployment benefits, can they take that?
3- If they CAN’T take any of my bank funds, when I get a job, can they THEN get a judgment to garnish my paycheck down the road?
4- Would they really try to obtain a judgment for a 5K debt?

5- IF NO, to the original question, what should I do?
A couple of extra questions, how does the Statutes of Limitation work in N.Y.? Would the credit report tell me if something was written off and which debts are active? Would it show me if statute of limitations is about to run on debt you owe?

Thanks for your time. Much appreciated.

Joined: 10 Oct 2009
debranewell2008's page
Posts: 591

111 Magic Points

Posted on Tue Nov 10, 2009 10:17 pm  

I believe the SOL for New York is 6 years and it starts on the day the account was opened. You would have to pull a credit report and check the dates. If it hasn't past than yes they can get a judgment against you. And can take the extra money you have in the bank. But they cannot take your unemployment. But you need to let your bank know that the money being deposited into your account is unemployment so they can stop the garnishment before it goes through. But as far as the other money they can take that. And yes if you get a job they can garnish your wages as well.

Posted on Tue Nov 10, 2009 10:46 pm  

Thanks for the reply debranewell2008. So your saying they CAN chase you even for a corporate credit card....? What do you mean by "open"? The date that the credit line was opened or the "Date Opened" line on your credit report for that debt..?

Also, what does CLOSED account on the credit report mean? And the account that the original post was referring to is NOT on my credit report at all??? Hows that? Thanks again everyone...

Posted on Tue Nov 10, 2009 10:48 pm  

o and FYI: i went through all 3 reports, and that debt that they are chasing me for is not in any of them.

Joined: 26 Feb 2008
fireyone's page
Posts: 4246

142 Magic Points

Posted on Tue Nov 10, 2009 11:30 pm  

I need to make a small correction here. The date the Statute of limitations begin is not from the date the card is opened. The SOL starts when the account was last paid on. Lets say you made payments up until July of that year and nothing in august. Then the SOL would have started in august (date of last activity).
Also the best way to protect your money is to remove it. If they do get a judgement then you are going to always have to watch your accounts.
I would advise sending these collectors a debt validation letter. Even though the SOL has not passed sometimes when collectors buy debt they do not get all the legal information they need to be able to lawfully collect. Get the validation.

Posted on Wed Nov 11, 2009 4:58 am  

Hi fireyone, I'm still unsure of what a closed account means on a credit report? I'm assuming closed account means I dont have to worry about collections on that debt anymore?
If send the collectors a debt validation letter, wont it restart the SOL?
And why doesnt this debt show up on my credit report? I've checked all 3.

Joined: 10 Oct 2009
debranewell2008's page
Posts: 591

111 Magic Points

Posted on Wed Nov 11, 2009 11:14 am  

Hi guest,

No you don't have to worry about a closed account anymore unless it is a charge off account or something like that. And no sending a debt validation letter will not start the SOL over again. They only thing that will start it over again is if you pay on it. Now as far as it showing up on your report I don't know. I'm also dealing with one that is not on my report.

Joined: 10 Feb 2010
vidasandi's page
Posts: 4

75 Magic Points

Subject: credit
Posted on Wed Feb 10, 2010 1:18 pm  

without authorization nobody can restrain your bank account.or be able to extract cash from it. since the business is closed, and the amounts not paid, is there anyway they can link it to you? if yes, then may be you have a problem otherwise you need not worry. If these accounts are a part of bankruptcy you declared you should be fine, no need to pay them off, but if they are not paid and show on your credit report then it can be a cause of concern, because this is how it can be linked to you, secondly it wont help your credit score. As far as getting a job and then them coming after your paychecks, it's again a no! because that is personal and confidential information between you and the bank, and no third party can have access to it! they might go for a judgment for a 5k if their company is doing bad, and is in need of funds, so they will try to squeeze every little bit they can, but if they are financial giants, then 5k is like peanuts for them, and they are just trying to see if you will get scared and bend under pressure.
According to me, let it be asit is now and IGNORE the issue. do not pay right now.In all probability they will give up on it!
All the best!

Joined: 10 Mar 2010
NightStar's page
Posts: 142
Location: Illinois

3177 Magic Points

Posted on Wed Mar 10, 2010 8:33 pm  

Ouch, business debt is different than personal debt, there is no protection from the Fair Debts Collection Practices Act.

If you are the owner of the company, or a personal guarantor on the credit cards they can come after you personally.

For that amount it might be worth contacting your bankruptcy lawyer and asking if you can re-open the bankruptcy to include these accounts. I really think that is the best way to fix this problem. It may cost some money to get this accomplished.

Might even be able to file a separate chapter 11 bankruptcy on the business to make sure all of that debt is discharged. I am not sure how these types of bankruptcies work.

You really should speak to a lawyer concerning business debt.
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