Interesting Credit Situation

Anonymous · ‎04-20-2015

I have become the "Credit Guru" in my family (which is funny because I am still learning myself) and I need some help on an issue my dad has.

My dad owned a business and had a business card attached to it. The business started to go south, and he ended up selling. Listed in the selling agreement was that the buyer would take over all debt associated with the business, which at the time was about 100k on the company card. During the transaction, letters signed by both parties were sent to BOA stating the new buyer would be taking over the card.

All was good for a year, and the buyer made all payments and everything. Then for whatever reason the buyer decided to stop paying. My dad started getting collection calls and his credit took a huge hit.

He has contacted the CRAs and BOA about the issue but it doesn't seem to be getting resolved.

As of today, all 3 reports show that the account is disputed. EQ and EX show closed. And TU just shows "Disputed by creditor".

We are trying to determine his next steps. He has flawless credit otherwise, and even with this derog he is still in the 750+ across all 3. He hasn't had any issues until he was declined for Citi AA Platinum, and the analyst told him that they can't do anything with the collection on his account.

Again, he has already sent letters to the CRAs, disputed online, and contacted the collection agencies and the initial bank. But there still seems to be issues. He is willing to try any of it again if you guys think that's the best option.

Thanks for any advice!

Anonymous · ‎04-20-2015

I am surprised that BOA didn't close out the card under your Dad's name. Do you have the signed agreements between the new buyer and your Dad?

This may result in having to hire an attorney. I will let the more experienced credit gurus respond accordingly.

Anonymous · ‎04-20-2015

He does still have all the paperwork. I think if possible he wants to avoid hiring a lawyer because that could cost as much as the debt on the card.

Anonymous · ‎04-20-2015

Here's the deal (at least the way I see it) - the transaction was between your dad and the buyer. The credit grantor is not obligated to abide by that agreement if they feel the buyer may not be able to hold up his end of the bargain. Its kind of like co-signing for someone.

I think your dad has a legitimate case, but not against the bank, he would have to pursue to buyer in court. Whether or not the amount in question is worth going after is something only he can decide. If its a relatively small amount, he would mostly likely have to pursue in small claims court where no lawyer is needed anyway.

Anonymous · ‎04-20-2015

@Anonymous wrote:
Here's the deal (at least the way I see it) - the transaction was between your dad and the buyer. The credit grantor is not obligated to abide by that agreement if they feel the buyer may not be able to hold up his end of the bargain. Its kind of like co-signing for someone.

I think your dad has a legitimate case, but not against the bank, he would have to pursue to buyer in court. Whether or not the amount in question is worth going after is something only he can decide. If its a relatively small amount, he would mostly likely have to pursue in small claims court where no lawyer is needed anyway.

Interesting. I do see what you mean. Does it make a difference if the company card is in the company's name and not my father's?

Anonymous · ‎04-20-2015

Even if the Company card is in the Company name it is attached to your Father's SSN. I agree with Norman... the breach is between your dad and the new buyer. How much is the debt? Is the card still being used?

Anonymous · ‎04-20-2015

@Anonymous wrote:
@Anonymous wrote:
Here's the deal (at least the way I see it) - the transaction was between your dad and the buyer. The credit grantor is not obligated to abide by that agreement if they feel the buyer may not be able to hold up his end of the bargain. Its kind of like co-signing for someone.

I think your dad has a legitimate case, but not against the bank, he would have to pursue to buyer in court. Whether or not the amount in question is worth going after is something only he can decide. If its a relatively small amount, he would mostly likely have to pursue in small claims court where no lawyer is needed anyway.
Interesting. I do see what you mean. Does it make a difference if the company card is in the company's name and not my father's?

It depends.

Was your father incorporated? If so, what kind? Did he co-sign for the business?

If your dad sold a corporation, with a card only in the corporation's legal name, then they shouldn't be coming after him. If his credit was used as a basis to get that card, however, then he's still on the hook.

gdale6 · ‎04-20-2015

The only way he is still liable is if he gave the grantor a PG, what needed to happen in this case would have been the new owner assuming the PG. If there is no PG he isnt liable for anything if the card is in the name of the company.

Anonymous · ‎04-20-2015

UPDATE: Spoke with him about everything that has been said. He said BOA acknowledged the turn over and said all that had to be done was for the buyer to sign an agreement. He gave that form to the buyer and it was completed.

The mailing address on the card was changed to the buyers, and he stopped receiving monthly statements.

When he started receiving collection notices he called BOA who said that they never received the signature from the buyer. So why would they change the address and stop billing my father if they never received that info?

The amount due is around 25k. They offered my father an 8k settlement, which he was advised not to take, because other debts that were involved with the company would come after him saying he took responsibilty for the card, so he can pay others as well.

When he refused the 8k settlement they said they would write it off and turn it into collections. So now, he has a new collection agency come after him every couple of months, he sends in all of the documentation and it eventually gets sold to a new company.

Should he still pursue BOA, or where should he look to resolve this?

gdale6 · ‎04-20-2015

@Anonymous wrote:
UPDATE: Spoke with him about everything that has been said. He said BOA acknowledged the turn over and said all that had to be done was for the buyer to sign an agreement. He gave that form to the buyer and it was completed.

The mailing address on the card was changed to the buyers, and he stopped receiving monthly statements.

When he started receiving collection notices he called BOA who said that they never received the signature from the buyer. So why would they change the address and stop billing my father if they never received that info?

The amount due is around 25k. They offered my father an 8k settlement, which he was advised not to take, because other debts that were involved with the company would come after him saying he took responsibilty for the card, so he can pay others as well.

When he refused the 8k settlement they said they would write it off and turn it into collections. So now, he has a new collection agency come after him every couple of months, he sends in all of the documentation and it eventually gets sold to a new company.

Should he still pursue BOA, or where should he look to resolve this?

IMO A lawyer should be consulted on this matter for a legal opinion. If he wont do it then send BoA an ITS letter.