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We have a small business, LLC, and owe our Bank of America Visa almost $16,000.00 and are 2 months late on a minumum.

Holland, TX |

Can they take our business or personal assets, and how can we make a deal to pay monthly and lower the interest and late and overlimit charges.

Attorney Answers 1


The consequences are different depending on whether this card is issued to you personally, or to the LLC. Forming an LLC creates a veil that drops between your business and your personal life. This veil can only be pierced by creditors in limited situations. The veil generally works both ways - business creditors cannot reach your personal assets, and personal creditors cannot reach your business assets.

The best thing to do is to keep in contact with your creditors. Sometimes, they are more willing to work with you if they know you are genuinely concerned about keeping current on your payments. This is not guaranteed, however. Each creditor's internal polices on how to manage delinquent accounts can change, and because they have huge numbers of employees working in these areas, your particular situation can depend largely on how the person you are dealing with decides to handle your situation.

Credit card agreements are very one-sided contracts in which the credit card company has unilateral ability to change the terms of the contract. Meaning, if they want to help you, they can. If they don't want to help you,. they don't have to. So you will not be able to force them to change your interest rate, lower your monthly payments, or eliminate your over limit charges. Many of the advertisements you hear about which promise to "lower your interest rate and get you out of debt fast" employ a very aggressive tactic to do so. They will advise you to stop paying your bills completely, and wait until the account is about to be charged off. At this point, the creditor is scared that they will have to write the debt off as a bad debt, and are more willing to negotiate with you to ensure that they get something instead of nothing. While this can be effective, you devastate your credit in the process. Further, there are some credit card companies which will simply not give in to this tactic and may come down on the balance a little, but will require you to pay the reduced balance off in full. This makes sense, as they would be taking a chance by setting up an arrangement for you to pay monthly installments at a reduced rate when you have already displayed a willingness to stop payment on the account in order to negotiate better terms.

By all means, the first thing you should do is contact your creditor and see what you can work out. If that doesn't work, then alternative options may be better. But remember that if you have multiple lines of credit that are going into default, it doesn't take many charge-offs to equal the same hit your credit score will take in bankruptcy.

DISCLAIMER – By reading or using this answer or the information I've provided here, you agree that I am not your attorney, that the information you have found here is not legal advice, and that I am making no representations, promises, or guarantees that any information on this site will do anything other than entertain you.

You agree that the information found here is presented AS IS. You accept full responsibility for verifying that the information presented in this answer is accurate and up to date and for consulting with me or another attorney to make sure that the information is applicable to your individual situation.

I am a Texas lawyer. I am not familiar with the laws of other states. The information contained in this answer is based on U.S. law and Texas law. If you live in another state or another country, the information on this site may not apply to you at all, or you may have different rights under the laws applicable to you or your transaction. Therefore, everything I said in the disclaimer above applies double to you.

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