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Richard, Attorney
Category: Business Law
Satisfied Customers: 54848
Experience:  32 years of experience practicing law and a businessman.
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I had a commercial loan from a bank for my LLC. The signature

Resolved Question:

I had a commercial loan from a bank for my LLC. The signature on the loan had my name and the word President after my name. I had to close my business down in 2008. I tried to continue to pay the business loan until I lost my job. Now, the bank has turned the account over to a collection agency that is constantly bugging me. Am I personally responsible and if so, what actions can the bank take against me personally? Also, the collection agency said they pulled my personal credit, but I didn't give permission. Can they do that? The loan doesn't even show up on my personal credit as it only had my EIN. The LLC was in the state of Florida.
Submitted: 4 years ago.
Category: Business Law
Expert:  Richard replied 4 years ago.

Good afternoon. If the loan was in the name of the LLC and was signed by you as President of the LLC, the only risk is to the LLC, not to any individual owners of the LLC. The lender and the collection agency can pursue only the LLC and any assets distributed from the LLC when it was dissolved. You have no personal liability for this.


With regard to the collection agency, a recipient of such contact from a collection agency would want to send them a certified, return receipt requested letter explaining the recipient has no liability for this debt and demand they immediately cease and desist all further efforts to contact the recipient and/or anyone else to collect this debt. The recipient would inform them that any efforts to do otherwise will constitute a violation of the Fair Debt Collection Practices Act and that each and every violation would be reported to the Federal Trade Commission. Each violation carries at least a $1,000 fine, so this should be the end of the problem.


I hope this has given you information that has been helpful to you. If the information seems more general than specific, please be aware that we are only allowed to provide information and not specific advice. If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping others or taking a break. If you need additional clarification on this question, please do not hesitate to click Reply and I will be happy to do what I can to help you further. Thanks for allowing me to be of service to you. Please be aware that the information provided here is not legal advice. Rather it is simply general information. All states have intricacies in their laws and any information given is simply information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Customer: replied 4 years ago.
I did tell the collection agency about the Fair Debt Collection Act and they said it didn't apply because it was a commercial loan and that act doesn't cover commercial loans. Is that true?
Expert:  Richard replied 4 years ago.
That's the issue...although it may be a commercial loan to an entity, they are pursuing you as if it's a personal loan. They do not get to have their cake and eat it too. Let them know you will be filing the complaint with the FTC and they can deal directly with the FTC on the issue. You won't hear from them again.
Customer: replied 4 years ago.
Just one more question. The collection agency and the bank said that I signed a guaranty that does state in the next to last sentence " By signing below, I/we each also individually agree to the terms of the Guaranty which appears on this application" I did sign that as XXXXX XXXXX President. But, it does also state that "all owners of the company must sign below." I wasn't the only owner as my business partner never signed it. Does that make any difference to what you have stated so far?
Expert:  Richard replied 4 years ago.
If there was a personal guaranty of the LLC obligation, then it would be a legitimate debt. The fact that you signed as President, it would not be as an individual signatory unless you signed individually somewhere else.
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