co maker notification

[savemart55]

What is the name of your state?What is the name of your state?
Texas
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Hello,
I have a question about lending procedures. I signed a guarantee for a small corporation in September 2000 for a $10,000 loan. It was paid in full within a month. In Dec, 2000, I sold all of my shares to my partner and resigned, with a signed contract which prohibits him from incurring additional debts in my name. He requested another loan in 2001, and again in 2003.

During the 2001 loan application, he informed the bank that he was the sole owner, changed signatories to excude me, and opened new accounts. He was confident that I would not be involved with that loan.

He subsequently defaulted due to bankruptcy (in 2004). The bank, through a collection company is saying that my guarantee is still in force, though I was not made aware of any of these transactions until the loan was in default.

Now my excellent credit record is messed up, since I was given no chance to make good on this $9800.00 loan, that I didn't know even existed.
The bank has turned down my request for a settlement that keeps my credit clean.

Are banks under any obligation to inform guarantors of repeated transactions without their knowledge?

My mistakes were not directly informing the bank of the company sale,and signing an unlimited guarantee.

 

[willingtocope]

See a lawyer...

Since you mention a collection agency, I would assume that those are the people trying to tell you that you are responsible for this loan. CA's that try to collect business debt are no more reliable than personal debt collectors, so do not beleive anything they tell you. Rather than talking with them, you might want to talk with the bank directly...and you might want to get a lawyer to do the talking. If you do have the signed agreements you mention, then you can not be held responsible for this debt, although you may have to go to court to prove it.

If they have listed this debt on your personal credit report, then you have a good chance of suing them for violations of the FCRA and, although FDCPA really only applies to personal debt...the fact that they are screwing with your personal credit may allow you to invoke some of its provisions also.

See a lawyer...do not pay them...having a collection account on your credit record is intolerable and paying them will not remove it.

 

[JETX]

During the 2001 loan application, he informed the bank that he was the sole owner, changed signatories to excude me, and opened new accounts. He was confident that I would not be involved with that loan.

He subsequently defaulted due to bamkruptcy (in 2004). The bank, through a collection company is saying that my guarantee is still in force, though I was not made aware of any of these transactions until the loan was in default.

*** If this was in fact a completely separate loan (new application, new loan number, etc.) then you have NO obligation to it. Tell the collection firm (certified RRR) to cease any further contact with you about this other persons obligation and if they contact you, file a FDCPA violation suit against them.

Now my excellent credit record is messed up, since I was given no chance to make good on this $9800.00 loan, that I didn't know even existed. The bank has turned down my request for a settlement that keeps my credit clean.

If this is in fact NOT your loan, why would you even suggest any kind of settlement?? If what you say is correct, they are in violation of several laws and subject to your own civil action against them.

Are banks under any obligation to inform guarantors of repeated transactions without their knowledge?

No.

My mistakes were not directly informing the bank of the company sale,and signing an unlimited guarantee.

Wait a minute.... your earlier post talked about a limited guarantee as to the original note only. Are you now saying that you signed some kind of perpetual guarantor note?? If so, then you could be liable for subsequent loans. Clearly, it is imperative that you read your original obligation..... and talk with the bank.

 

[savemart55]

Thanks for your responses. The bank is saying that this loan is simply the second renewal of the original year 2000 loan. I have asked them for documents pertaining to the renewals, to which their attorney answered there are none. He stated that it is just a revolving line of credit that was based on the original application. Any arrangement between my partner and I is irrelevant according to him. I did sign a very open ended guarantee, but I expected that at some point in those four years that the bank would have to ask for my signature again or at least send me a notification that I was further indebted to them. I could have fixed this long ago if I would have had any idea of what was occuring. I have seen the application for the first renewal which does not have my name anywhere and lists my ex partner as the sole owner. I asked to settle this because my ex partner has agreed that this is his responsibilty, and was willing to try to make monthly payments to me to satisfy the loan. I just asked their attorney to be able to make up the back payments and continue with the original $350 or so per month. It's weird because I know that the company was extremely insolvent at the time of the second renewal (liabilities exceeded assets by at least $300,000.00). It must have been approved on false financial data, which probably isn't relevant either.

 

[JETX]

The bank is saying that this loan is simply the second renewal of the original year 2000 loan.

Of course they are going to try to pull that on you, as they see that as the only way that they might scare you into covering their loss.

I have asked them for documents pertaining to the renewals, to which their attorney answered there are none. He stated that it is just a revolving line of credit that was based on the original application.

Tell him to show you how you are obligated to pay this loan or to simply go find another sucker to try to play that crap on. You cannot be held liable for someone elses obligation unless you agree to it. And if they can't prove you are obligated..... case closed.

Any arrangement between my partner and I is irrelevant according to him. I did sign a very open ended guarantee, but I expected that at some point in those four years that the bank would have to ask for my signature again or at least send me a notification that I was further indebted to them.

There you go.... opening the door to what should be closed. Either you have a continuing obligation or you don't. Which is it?? I can't read your signed obligation so can't figure out what you have.

I could have fixed this long ago if I would have had any idea of what was occuring. I have seen the application for the first renewal which does not have my name anywhere and lists my ex partner as the sole owner. I asked to settle this because my ex partner has agreed that this is his responsibilty, and was willing to try to make monthly payments to me to satisfy the loan.[/quote[
And your trying to place Mr Nice Guy is going to stab you in the ass.... at least hope it is a knife. Why the hell would you get 'into bed' with an ex-partner who has already filed for bankruptcy?? Clearly, something is not right here..... and your continual interest in stepping in front of this moving bus is beyond reason.... or rationality.