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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 118773
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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i am being sued by Asset Acceptance for an unpaid credit card

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i am being sued by Asset Acceptance for an unpaid credit card account. This account was used in a business i owned, and which i sold in 2005. The account shows my corporation as the "primary holder" of the card but the bank required me to sign as an individual gaurantor. Am i not protected by the corporate veil for such a situation? The corporation is defunct now. When Asset purchased the debt, did they inherit the same terms and conditions as the bank even tho they (Asset) did not extend me any credit nor lend me any money?
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

On any corporate debt, the owner of the corporate entity is not liable for the debt of the corporation UNLESS they signed a personal guarantee for the debt. Thus, I am afraid the corporate veil would not protect you for this. I am afraid that once you signed as guarantor with a personal guarantee you made yourself personally liable in the event the business did not pay. When Asset purchased the debt they purchased the exact same terms as the bank had with you, they are a "successor in interest," with the same exact rights as the bank had.

HOWEVER, all is not lost. Under MI law there is a 6 year statute of limitations for suit for breach of contract on open credit accounts from the date of last payment and as such you need to explore a dismissal based on the debt being barred by the 6 year statute of limitations.

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Customer: replied 4 years ago.

re: time barred debt.... somewhere along the way the bank dipped into one of my other accounts i had with them and made a payment on the account in question without my knowledge. This "re-started" the clock for the SOL apparently. There must have been some of that good old "fine print" allowing them to do that. So, i guess i'm screwed on that end too?

Thank you for your response. You need to get the copy of the contract agreement to see if they had the right to take payment from one of your accounts with them without court judgment first and if they did not then you can challenge based on the ground they took the payment illegally and that it would still be time barred because that was not a proper payment as it was not allowed by the card agreement. If there is a clause in the agreement allowing it, then I am afraid you are back to negotiating or making them actually prove the debt by producing the contract in court and also making them prove an itemized list of the charges showing they are accurate.
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Customer: replied 4 years ago.

Thanks Paul...this last part may be my any rate i will now be able to go into court with some knowledge of the related laws....great job Thanks Russ

Thank you for your response. They do have to prove all of the elements of the debt including the contract with you as well as proof the amount they are seeking is accurate and at the least it may be grounds to reduce what you owe.

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