I got a loan from a company which is no longer in business, (bankrupt, i think) and has been taken over by a junk debt collector

Asked almost 5 years ago - Salt Lake City, UT

My business got a loan for app 60,000 dollars, and was to be paid back by visa credit card debits from my business. they would get 30 % of all transactions. They filed a UCC against the business as well as a personal guarantee from me. They went under, and after researching, i believe the company that bought them, is a junk debt collector. i paid him back 17,000 dollars, and we still have a balance. My questions are:
he is threatening to enforce the UCC filing on the business. can he do that without litigation or lawyers? also, i requested debt validation recently, according to the fair debt act. they are supposed to show proof in 30 days, or the debt is no longer viable. is that true? also, can i release or delete the UCC filing, if the original company is no longer in business? thanks

Attorney answers (2)

  1. Shawn B Alexander

    Pro

    Contributor Level 20

    Answered . You will need a commercial transactions attorney in Utah. U.C.C filing need to be perfect to become a priorty over other debts in bankruptcy. The filings represent a debt and are to provide notidce of the obligation Different types of debt are perfected in different manners. Your attorney will need to verify the perfection of the liens, the research can be done online in most states and counties. The financing agreement and the statement you signed may or may not be assignable, the filinings are valid for five years and can be a priority over other typres of debt.

    Good Luck

  2. Andrew Daniel Myers

    Contributor Level 20

    Answered . I agree with the previous answer.

    I can only add that in many instances lenders protect themselves by making their loans assignable. So, the junk debt collector can proceed if they have the documents. If they do NOT have the correct documents and if the lien is not properly perfected, you may be able to mount an aggresive defense and to negotiate. Junk debt collectors are notorious for shrinking away if their paperwork is not correct and you may be able to settle for cents on the dollar or even prevail. However, not having seen all of the documents, I highly reccomend that you retain a good business lawyer in your jurisdiction.

    FInally, debts incurred primarily for business or commercial purposes are not subject to the provisions of the Fair Debt Collection Practices Act, or FDCPA, as it is known.

    Best wishes with it.

    This answer is provided for informational purposes only. Actual legal advice can only be provided in an office consultation by an attorney licensed in your jurisdiction, with experience in the area of law in which your concern lies.

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