Help Needed with Husband's bad business debt, Thanks.
Date: Sat, 10/11/2008 - 05:48
Okay, here is my problem. Any advice and help will be great, and thank you in advance.
My husband has one loan with citibank, given to his business which was set up as a C-Corp and the actual business bank account that was at citibank has now been closed. The line of credit was an unsecured facility for $50,000, which Citibank had given based on the money that was going through his business, for more than 8 years.
He also has 2 Credit cards, one with Wells Fargo for $30,000/and He has been paying the minimum payment of $400 on that card. The 2nd Card is with Citibank, for $8000, and they raised the interest to 29% and he can no longer make the payment. He has pleaded with them to reduce the interest rate....
The loan for $50,000 has gone into collections and he was called by the collecting agency, and was not in, so I took the call. I explained to them, that my husband was self-employed and his work stopped coming in and was drastically decreased by cutbacks in his industry. I told the debt collector that he will be able to see from the last two years tax returns that we have had no income.
He immediately, took my name and said, "I see you as a signee on the business account." I said "Yes, but that's all I did, and I did for a while work for the corp in billing and accounts" I was not an owner....
As you can imagine, this is all causing a lot of stress on us, and our marriage. We have two children at home, and one son in college, who fortunately is attending on a scholarship.
Over the last few years, we had taken out home equity loans to survive and keep the business going. Our mortgage had become more than our homes value, and we were making mortgage payments with the help of my family. Again fortunately for us, My Mom decided to payoff the mortgage so that our home would not be repossessed! Her only condition was that the house be transfered into her and my joint names and my husband's name be removed from the title. She knew we were having difficulties and did not want to pay the entire mortgage off unless she was sure that the house would not be mortgaged by us again. Of-course she was also trying to protect me.
My questions is, are my husband's debts my responsibility? Will his bad credit affect my credit? (It's not too bad right now) It's around 690, where as it used to be 720..... And if he is taken to court will they be able to put a Lein on the house, which is now in my mother and my name?
Thanks for answering, it's all a little scary right now, and I hope someone can give me some advice....
And NO, my mother refuses to help anymore than she has, as she feels its unfair to other siblings, and I also agree. Thanks
Were these lines of credit personally guaranteed by your husband
Were these lines of credit personally guaranteed by your husband? If so, they can definately effect hs credit. Were you a joint account holder or an Authorized User? AU=no financial responsibilty. Unfortunately, since these are business debts, you are not afforded any protection under the fdcpa. Your are, however, protected by the FCRA if these appear on your personal credit reports.
Thanks Nascardevil. I was an authorized user. I am not sure if h
Thanks Nascardevil. I was an authorized user. I am not sure if he personally guaranteed it.... What's a personal guarantee, he assumes it's a personal guarantee because he was the sole owner of the S-Corp and he signed for the line of credit facility. Except it was taken out and given to his S-corp account which has now been closed. The fact that Citi has handed it to a Debt Collector means he is liable, and not the S-corp.... The wells fargo is more like a Business Credit Card. And his Citibank Card, is just a Gold card with them.
When he speaks to the debt collector, I am sure he will ask him, what assets he has, and if he owns the house? Which he doesn't ..... Can they put a lien on it? because it's also in my name, not just my mothers? If he tells the Debt collector it's his mother-in-laws house and leaves me out of it, would that be telling a lie? As the agreement with my mother was that during her life time it would be her house, the lawyer just made us joint tenants incase she passed away, he felt it would automatically pass on to me... I am just worried about the house and getting my mother involved. Who is old and will have a nightmare! Thanks for your reply.
A Personal Guarantee is Generally they are unsecured, me
A Personal Guarantee is
Generally they are unsecured, meaning they are not guaranteed by an asset, such as a home.
Thanks again, Nascardevil. So basically if the loan is unsecured
Thanks again, Nascardevil. So basically if the loan is unsecured, and lets say he gave a Personal Guarantee, as I cannot see why they would give him the loan without that.... I will try and find the agreement he signed and go through it as well... But lets say that's the case, and he has no assets other than a car he makes payments on. What will the debt collector attempt to do? There was a good post, in-fact put up by you, which I printed up, and gave to my husband on how to negotiate a settlement.
If the debt collector, will settle, my husband still does not have the money right now. Can he settle for less and agree to pay it over the next 2 or 3 years in monthly installments? Or do they not like that?
My husband says that he will show them his tax return, except after reading what some of these collectors do, as in the palisades lien, should he show his tax returns to the debt collector? They represent Citibank, or are a collection agency working for Citibank. I would like to think that Citibank would not hire scam artists, but who knows and we are so green to all of this......
Will they, or can they put a Lien on a house that's not in his name?
Also, what will the process be and how long will it take before they take it to court to get a judgement? Have there been situations where they don't get a judgement or is going to court automatic.... Also will they continue to charge interest on the loan?
How long will the judgement remain on his Credit Report? and will it ever be removed? If they agree to a settlement, do they agree to a payment plan?
Also should we just go to CCCS they charge $25 flat fee and $25 per month and take over the negotiations, and they just might be better at it. Are they reliable?
Sorry I bombarded you with all these questions! Maybe I should post new questions up on the forum.... Thanks again.
If you are cnsidering settlement, it is best to have the money i
If you are cnsidering settlement, it is best to have the money in hand before negotiations begin. Depending on the amount of the debt, you are very likely to be sued debt so the sooner you can get this taken care of the better.
Quote:
Will they, or can they put a Lien on a house that's not in his name? |
They can only lien property that is owned by him (and possibly you). If this is your mother's house, an asset search would show that you are not the owner.
Quote:
How long will the judgement remain on his Credit Report? |
Judgements remain on CR's for 10 years
Quote:
Also should we just go to CCCS they charge $25 flat fee and $25 per month and take over the negotiations, and they just might be better at it. Are they reliable? |
I am not aware of whether or not CCCS would be a viable alternative since you are dealing with debt associated with a business. Best bet is to call and ask. Also, research CCCS in your area via the BBB website to check their reliability rating.