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Personal Guarantee, Does FDCPA Apply?

Date: Tue, 11/17/2009 - 23:38

Submitted by anonymous
on Tue, 11/17/2009 - 23:38

Posts: 202330 Credits: [Donate]

Total Replies: 5


I had a business in which I personally guaranteed an account. Needless to say, no longer in business. The account has been sent to a collection agency. I'm getting harassing emails, constant phone calls (told to stop), 3rd parties have been told about this debt, then wont even send written notice of the debt. The list goes on!

The Debt collector claims FDCPA doesnt apply! Is this true?

Does the FDCPA apply to business accounts which had a personal guarantee?

If so, should I hire an attorney to sue this company?

THANKS!


Nascar is correct - the FDCPA rules of construction apply based on the nature of the debt. Since the nature of the debt was for business use, the FDCPA does not apply to collection thereof.

Generally when there is a personal guarantee involved, they have to exhaust their efforts on the primary borrower (business) first before they can go after the guarantor. Although if your business is now defunct or insolvent, then they can go after you personally.


lrhall41

Submitted by DebtCruncher on Wed, 11/18/2009 - 05:22

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The business no longer exists, and has no assets to pay the debt. Once they start coming after me personally, then does FDCPA apply? The original business was an L.L.C. if that matters.

Why is there so much protection for personal debts but not business debts?

So basically this company can call whenever, talk to who ever, and essentially do what they want to collect the debt?


lrhall41

Submitted by on Wed, 11/18/2009 - 12:11

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Quote:

Once they start coming after me personally, then does FDCPA apply?

No, because the underlying debt was for business purposes. FDCPA applies to consumer debts "obtained primarily for personal, family, or household purposes."

Quote:
Why is there so much protection for personal debts but not business debts?
I don't know for sure. But I think the congress felt that business owners have a level of understanding and sophistication well above the average person. In other words, the common person may not realize what they're getting themselves into by taking on debt; but a business owner should.

Quote:

So basically this company can call whenever, talk to who ever, and essentially do what they want to collect the debt?

I'm sorry to say that, unless your state has it's own collection laws that include business debts, then yes.


lrhall41

Submitted by DebtCruncher on Wed, 11/18/2009 - 17:22

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