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     | Tuesday, February 08, 2000 - 03:47 am  I put this to the group: If a sole proprietor has a debt collector seeking payment of an old debt, incurred as doing business (yellow page ads), does the FCRA apply to this situation? This person is being hounded day and night to make payments on a debt incurred in the business and he has sent a cease and desist letter to the collection agency. He was wanting the phone calls to stop, especially during the day, at his work, and cell phone. Well, the collection agency stated, "nice try" but the FCRA does not apply to busniess debts. I have never run across this yet, and am not sure how to suggest this person proceed. He is going directly to the original creditor to pay this debt, and wants to get this collector out of the picture. If the FCRA does not apply in this situation, then would it be fair to say, that this debt can not show up on the sole proprietor's credit reports? Any input would be greatly appreciated. Thanks, Barry N CreditMania.com BTW... Christine email me sometime.
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| | Tuesday, February 08, 2000 - 07:21 pm The FDCPA applies to personal, household debts. However, that doesn't mean that the collection agency has the right to purposely disrupt the operation of your friend's business by calling him incessantly. Laws against harassment and extortion still apply. Perhaps your friend could approach the situation from that standpoint. Here is another idea. Since your friend is working out a deal with the original creditor, he could ask them to get the collection agency off his back. If the creditor assigned the debt, then they can stop the collection agency. If the creditor is accepting payment, there is a good chance that the debt was assigned (as opposed to sold). I think it would be a good idea for your friend to request a staff opinion letter from the FTC asking why the FDCPA should not be expanded to include business debts for which a single individual is responsible for payment. That's a tough question to answer, and it might get them thinking.
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| | Sunday, February 13, 2000 - 05:41 pm With a sole proprietership, there is really *no* legal separation between the business and the owner. The individual is the one doing business and incurring debts, regardless of whether he calles himself "John Smith," or "XYZ Services." The business's debts are the owner's personal liability, and can appear on the debtor's personal report. Plenty of people have declared personal bankruptcy as a result of sole proprietership business debts. However, as Barbara mentioned, the Fair Debt Collection Practices Act does seem to make a distinction: ------------------------------------------------- FDCPA § 803. Definitions 15 USC 1692a (5) The term 'debt' means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are prim arily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment. ------------------------------------------------- So your friend loses both ways. The immediate response to the collectors should be to simply ignore them as thoroughly as possible. Just hang up at work, and screen all calls on an answering machine at home. The full text of the FCRA and FDCPA (along with numerous other important credit and banking laws) can be found at... http://www.cardreport.com
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