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hello and welcome to today's Delta credit tip so you defaulted on a business loan what can you turn to to help protect you as a borrower in the situation maybe the Fair Credit Reporting Act maybe the Fair Debt Collection Practices Act well stay tuned we're gonna fill you in on today's Delta credit tip hello and welcome back to today's Delta credit tip I'm Michael Holmes from Delta credit restoration yet bringing you more information to help you and your credit restoration process today we're talking business credit default and what your rights are and what the laws are that are going to protect you so hopefully you'll find this information helpful if so give us that thumbs up don't forget subscribe and hit the notification bell so that it every week as we come out with more information to help you and your credit restoration process you get this information right out of the gate and you can use it right away okay so let's talk about that business day okay one thing that we is a credit card company we really kind of encourage our customers to do is to have multiple streams of income and the easiest way to do that is to set up a small business it could be an online business it could be a retail business it could be a service related business but having that multiple stream of income is a really big lifesaver sometimes financially but sometimes those businesses don't quite work out and if you default on a business loan things are a lot different than when you default on a consumer loan now with any kind of debt and debt collection and that sort of thing there are two sets of laws there are both the federal laws and the state laws okay so from a federal perspective as a consumer you can always count on the Fair Credit Reporting Act you can depend on the fair question Practices Act and you can also rule rely on the Fair Debt Collection Practices Act per state but in the case of business debt that isn't exactly gonna hold any water because all of the Fair Debt Collection Practices Act in the Fair Credit Reporting Act laws are designed to help consumers individual consumers with household accounts right and the reason why is because of what they call the layman effect if I as a person and borrowing money against the behemoth UPS let's say Bank of America it is not assumed that I'm going to understand to the same degree the laws and regulations and rules and all that other stuff that Bank of America will and so these laws are supposed to level the playing field a little bit but if I've got business a getting into a contract with business B and something goes south whether it's a credit card transaction or some sort of agreement of services or whatever it's assumed that these two businesses are equals there is no laymen in this situation so none of these laws apply now which you may want to look towards are the state laws now granted there are always going to be things like exemptions like certain things that you as a person you're going to be able to exempt from collection activities and that sort of thing but it's minuscule to say the least in every state again they're gonna have their own guidelines but in most states again it's still very miniscule here in the state of Florida the only rules and regulations that commercial debt collectors have is that they have to register with the state that's pretty much it and then it excludes any debt collector that's outside the state that's collecting from a debt that started outside this but you are now in this state it also excludes any lawyers meaning title companies real estate brokers I mean there's a lot of a lot of exemptions to that rule it's just strictly those that are in the business primarily of being a commercial debt collector okay the only other thing that you can really hang your hat on is this made up a commercial collection agency Association where it's just something that they pay a do to every year to say that they're qualified to be a debt collector and they give them some sort of tutorial tutorials every now and then but more importantly what those associations are doing or just simply making them better debt collectors okay and teaching them in the ins and outs of how to do what they do better not necessarily not infringing on your personal rights but really there are none so if you're gonna go out and get business day the one thing that you're going to want to do to help protect yourself is make sure that you're not signing on as a personal guarantor because then now really what this balls down to is where does your liability personally start and in 99 percent of most business loan situations whether it's a credit card business line of credit a business loan equipment loan or even commercial property you as the owner are going to have to sign as a personal guarantor so that liability is going to transfer from that business entity onto you and now all of your personal assets can be attacked as well so if you have not established business credit exclusively for your business where you can keep your social security number off of that application and keep yourself from signing on as a personal guarantor that is really the only layer of defense that you're going to have to protect yourself against commercial collection agencies the problem is is how are you gonna do it and without having a really really successful business or a long ly established business it's gonna be very difficult as a matter of fact SBA requires it that if anybody anybody that has 20 percent ownership of the business and up to 80% of the business have to sign this personal guarantor so there are very specific banks out there that will do business loans without a personal guarantor if you're trying to establish some business for your credit make sure you're asking that bank before you apply hey do you provide that option where it's only my tax ID that you will take and not me as a personal guarantor if the answer is no go to the next lender once a lender says yes then you need to find out well what are the criteria that my business has to display to make this go through and that will hopefully protect you at least personally from the commercial collection agencies that are going to come after those default of debts alright so again hope this information help them so give us that thumbs up don't forget subscribe and hit the bell so that we help you every week when come out with a new stuff in the meantime make the choice make the change Delta