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Old 11-09-2006, 12:41 PM   #1 (permalink)
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Small Business Debt

Hello I am the president of a VERY small retail Satellite business, I have filled articles of organization to become an LLC. My problem is I have a small amount of advertising debt I have not been able to pay and have been sent to collection. Part of the problem is some crediters are trying to charge me as much as 16% interest on the debt. What should I do?
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Old 11-09-2006, 03:08 PM   #2 (permalink)
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Originally Posted by Sattv4u
Hello I am the president of a VERY small retail Satellite business, I have filled articles of organization to become an LLC. My problem is I have a small amount of advertising debt I have not been able to pay and have been sent to collection. Part of the problem is some crediters are trying to charge me as much as 16% interest on the debt. What should I do?
What do you mean, "What should I do?" How about a legal question? Also, tell us your State name. Also, tell us if you've read your contract.
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Old 11-09-2006, 06:50 PM   #3 (permalink)
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Creditors are well within their rights to charge interest, late charges, late fees, etc. that can snowball into amount much higher than the original debt. The previous response is absolutely correct..you have entered into a contract that the creditor can enforce by placing the account in collection and continuing to charge interest both on the original debt and arrearage. You may want to work directly with the creditor, explain the situation and work out some sort of repayment plan (many are willing to work out revised plans rather than write off the entire amount); some will even grant forebearance. The previous response also asked what I did .. where is the legal part of the question?
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Old 11-09-2006, 10:23 PM   #4 (permalink)
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Originally Posted by TheJury'sStillOut
Creditors are well within their rights to charge interest, late charges, late fees, etc. that can snowball into amount much higher than the original debt. The previous response is absolutely correct..you have entered into a contract that the creditor can enforce by placing the account in collection and continuing to charge interest both on the original debt and arrearage. You may want to work directly with the creditor, explain the situation and work out some sort of repayment plan (many are willing to work out revised plans rather than write off the entire amount); some will even grant forebearance. The previous response also asked what I did .. where is the legal part of the question?

Decent answer . . . however, because our writer never deigned us with his State name, we still cannot tell whether usury is involved, or whether this creditor is exempt therefrom. Also, we haven't seen that portion of the contract concerning "interest", late fees, or anything else concerning the charges allowed by the contract.
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Old 11-10-2006, 03:03 PM   #5 (permalink)
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The state is Nebraska and the legal question is what can be done to my personal credit if I'm the manager of the LLC with the debit?
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Old 11-10-2006, 05:47 PM   #6 (permalink)
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A creditor is legally entitled to attempt to collect on their debt, within certain guidelines and within the terms of your contract. They can legally enter adverse information on your credit report, i.e. late payments or those not made at all if the debt is not repaid within the terms of the original contract. They can continue to report that information as long as you are in arrears on the account and there's no distinction made between refusal to pay or inability to pay. Even if that account is brought current (caught up), that derogatory information can remain for as long as 7-10 years, depending on whether the account goes to collection, charge-off or judgment status. They are also able to charge late fees, 'over-the-credit-limit' fees and are able to increase your original interest rate based on your payment history .. all of which will directly impact any other credit you may have. Creditors are legally entitled to check your credit periodically (some check as often as every month) and based on that information, can also increase your interest rate (if you have a variable rate) without notice. The previous post is correct .. (again) .. that there are limitations on when the fees, etc can be charged and the amount. I believe those limitations are over and above what is stated in your original contract .. the previous author is probably better versed in that aspect. (Predatory Lending, HMDA, FCRA, ECOA (etc) and numerous other laws are very stringent in my field but they may not apply in this particular situation.)

Last edited by TheJury'sStillOut; 11-10-2006 at 06:22 PM.
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