Business Debt

by Eileen

I have a small business credit card with $20,000.00 debt on it. At this time it is over 90 days past due. Up until that time I paid on time and the amount due every month.

I have not used the card for about 6 months. I have now received a letter about sending the account to collection.

The credit card company calls daily. I do not answer the phone when they call. They want my husbands employment info, which I have refused to supply. I am a sole proprietor of my business. Do I have to give his info?

I can't afford the lower payments they have offered to me, with lower interest rates.
Do I have any options?

Comments for Business Debt

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Jan 14, 2010
Small Business Credit Card Debt
by: Gerri

I am glad you are looking for solutions to handle your small business debt. I am sure it's very stressful, but given that you do owe a fairly large amount to a single creditor, it's important that you do find a way to resolve this so you aren't sued. (Generally, the larger the debt, the more willing a credit card or collection agency may be to sue to collect.)

First, with regard to your question about your husband's employment, unless he cosigned for the debt, you are under no obligation to provide any information about his employment or finances. You can politely refuse and simply tell them that you don't want to provide that information.

Next, I would encourage you to look at all your options for handling this debt including debt negotiation. I recommend you listen to our podcast on negotiation to understand how this process works.

I also strongly encourage you to at least meet with a bankruptcy attorney. You may not need to file for bankruptcy, but you do need to understand what the creditor can and cannot do to you to collect. Since this is a business debt, the protections normally offered under the Fair Debt Collection Practices Act may not apply. Your consultation with the attorney will be free and confidential, so there really is no downside.

I suggest that after you make your appointment with the attorney, talk with this creditor. Say as little as possible and be non-committal. Tell them you are meeting with a bankruptcy attorney and cannot discuss the debt until after the meeting. That may light a fire under them to want to make a good offer to settle the debt.

Again, I know this is enormously stressful for you. Just take a deep breath, take one action each day, and you'll get through it.

Let us know what happens OK?

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