Challenging Personal Guaranty with Capital One

[Anonymous]

Hi,  new member here, although I've been reading on this board for over a year.

I own a small C Corporation and have been settling my debt with numerous Credit Card companies.  I've actually settled 7 out of 8 in the last 1 1/2 years leaving only a Capital One Line of Credit.

I hope to be able to settle this as well, but decided to dispute the validity of my supposed Personal Guaranty, as I know I never signed one.  So I sent a DV letter to them stating that I was only disputing the Personal Guaranty, that the Corporation does not dispute the validity of it's debt.  (They send 2 copies of all collection letters, one to me and one to the Corporation.)

I received the following today.  "Acording to our rcords, we received your application by Phone/Internet on....."  So if they ever sue me, to prove that I am personally liable they may have a recording of the application, but no signed guaranty.

Here's the important part that I don't understand.  "We have placed a disagreement code with a resolution of dispute on your credit file to the major credit reporting agencies."

Any idea what this means in this context?  I have a subscription to Experian so will check to see what this does to my FICO score tomorrow and in the days to follow.

Thanks so much for any help you can give me.  I love forums, am active on other ones, and knew eventually I'd have to post here as I'm trying to rebuild my credit.

[Revelate]

If it's simply a dispute resolution remark it won't affect your score; however, you'll want to get that removed before applying for a mortgage.

If it's actually a dispute being filed for you, that might discount the tradeline perhaps in it's entirety and that can do all sorts of wonky things to your score.

In either event it's transitory but as mentioned, long term you'll want to get them off just might take some time for the dispute to run it's course, and then you get to jump through a couple hoops getting the remarks off there.

[Anonymous]

Thanks.  So you're saying that the DV request is still in progress?  My main concern now is the status of the DV.  If they can't prove that I personally guaranteed it, then they can't sue me, only the Corporation - and, it should be removed from my Credit Reports.

It seems that this letter shows they are either ignoring my request to Validate the guaranty, or it is still in progress.

[Revelate]

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@Anonymous wrote:

Thanks.  So you're saying that the DV request is still in progress?  My main concern now is the status of the DV.  If they can't prove that I personally guaranteed it, then they can't sue me, only the Corporation - and, it should be removed from my Credit Reports.

It seems that this letter shows they are either ignoring my request to Validate the guaranty, or it is still in progress.

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That's beyond my ken, and when we're talking about whether you're liable personally for a certain debt, a professional would be the right person to discuss it with.  Presumably based on the comment you mentioned in your original post, they're working through it... might have come to a resolution and are just noting that you the customer disagrees with it, but it's not likely to end there for you honestly.

When did you get the LOC?  Pretty much everything for the past 5+ years has been personal guaruntee unless you have bulletproof financials as a corporation as I understand it... I know their CC's are all PG'd and have been for a while.

[Anonymous]

Account was opened in 2006.

[Anonymous]

Revelate, what do you mean by their still working through it?  I re-read my OP and don't see the reference?

Thanks.

[Revelate]

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@Anonymous wrote:

Revelate, what do you mean by their still working through it?  I re-read my OP and don't see the reference?

Thanks.

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Here's the important part that I don't understand.  "We have placed a disagreement code with a resolution of dispute on your credit file to the major credit reporting agencies."

That's what I was pulling that from; resolution of dispute suggests they're looking into it by my read rather than "verified" or similar with your dispute remark in the comments.

[RobertEG]

A DV request applies only to debt collectors.

They treated your communication as a direct dispute under the FCRA, not a DV request.

Thus, they consider it concluded, and are almost certainly not conducting a DV review or consider themselves to be pending further response.

They also reported that the dispute was resolved, so there is nothing to be deleted.

[Anonymous]

Thanks Robert, that's what I was coming to believe after more research on the web and finding out, as you said, that a DV doesn't apply to an OC.

They did send me a form letter asking if I disputed the validity, which is what I replied to. 

My main concern now in this step is to determine what if any documentation they have of the guarantee.  The Internet/Phone comment at least indicates they don't have a signed one.   What do you think of sending a letter such as this that I found on the web?  I'd edit it of course.  edit:  I just realized this is from a Scottish website, so the references don't apply.  However what I'm wondering is if I should push it in some way to find out what if any documentation they have.  Should they not be able to document my liability I would think I could get it off of my report.  

Dear Sir/Madam


Account No:  

You have contacted me regarding the account with the above reference number, which you claim I owe because of a signed personal guarantee.

I have no knowledge of signing a personal guarantee and dispute any personal liability for this debt.

I am familiar with the Consumer Credit sourcebook of the Financial Conduct Authority (FCA) which states the following.

"A firm must not ignore or disregard a customer's claim that a debt has been settled or is disputed and must not continue to make demands for payment without providing clear justification and/or evidence as to why the customer's claim is not valid." 7.5.3 

"A firm must suspend any steps it takes or its agent takes in the recovery of a debt from a customer where the customer disputes the debt on valid grounds or what may be valid grounds." 7.14.1

"Where a customer disputes a debt on valid grounds or what may be valid grounds, the firm must investigate the dispute and provide details of the debt to the customer in a timely manner." 7.14.3

If you do not cease collection activity whilst investigating my dispute you are breaking the FCA’s rules and guidance.

Furthermore, ignoring and/or disregarding claims that debts have been settled or are disputed and continuing to make unjustified demands for payment amounts to harassment.

I ask that no further contact be made concerning the above accounts unless you can provide evidence of my liability for the debt in question, including a copy of any personal guarantee you claim I have signed. 

I await your written confirmation that this matter is now closed. Otherwise I will have no option but to make a complaint to my local trading standards department and consider informing the FCA of your actions.

I look forward to hearing from you.


Yours faithfully

[rlx01]

That form letter is for use in the UK (where the FCA applies), so you would need to remove all FCA referen Ed and reword it.