Help: Being charged interest on a loan for which I received no statements telling me of this debt for the past 15 years. Surprise!

Question

Is this legal? This was a private loan within a small business. I was under the assumption that the bill was paid in full 15 years ago. My only drawback is that I never got them to sign to verify the payoff.... just told me the payoff and I paid it.

I am a part owner of this business and now that we are getting ready to move on the others whip this on me. Now with all the years past and the 10% interest this turns out to be a very large debt. This is being used against me in a very cruel way....please help in any way.

Thank You.
Dan

Answer 1

There is a ten year statue of limitations on debt collection, bankruptcy, etc. The problem is, if you start paying, even say, $1, you "acknowledge" the debt and the clock starts again.

Debt claims fall under the "he said, she said," rubric. In debt restructuring situations, the debtor is taught to write all their creditors DENYING debts. Some percentage of those creditors won't have the paperwork to back up their claims. Others will, and can press their claims. Then a court decides.

But in any event, a debt more than tens years old is a "stale," debt. A court is likely to rule in your favor. Unless you "acknowledge" the debt.

Answer 2

Investigate the statute of limitations in your area. 15 years sounds like in most places it is past the allowable time a debt collector can legally collect or report it on your credit report.

The statute of limitations means you still owe the debt, but they collector can no longer use the court system to collect it from you. They can file a lawsuit, they will just lose. Please read up on how to handle yourself with a debt that is past the SoL, so that you don't accidentally reset the clock.

What I don't know for sure is how that applies to a business, and I cannot remember ever hearing a difference between personal vs business debt, but it is best to consult a lawyer regarding it.

References:

• http://www.consumerfraudreporting.org/debtcollectionsol.php
• http://en.wikipedia.org/wiki/Statute_of_limitations

Answer 3

This sounds like a shady trick. I would consult with a consumer debt lawyer in your area. Most county bar associations in the US have a referral service, where they recommend a local lawyer and there is a reduced fee for the initial visit. I think the statute of limitations is 10 years in most cases, but it depends on where you live. From these bare details,I think they don;t have much of a case. Go see a lawyer and don't let them harrass you.