OLD 'Signature' Business Loan

[CADavid]

Jurisdiction

California

About 30 years ago I had a small sole proprietor business. I took out a line of credit for $50,000. At the time I believe it was called a 'signature loan' at the bank that I used for the business.
That business has been gone for more than 20 years.
I tried to find all the mergers etc but I think the bank has been merged / acquired / etc. at least 4 times including an FDIC takeover in the 90s or whenever that was popular. Currently US Bank.
I have drawn on the account from time to time. The last time 2-3 years ago and the balance now is about $40,000.
Online there is no social security number associated with the account. I get year end interest statements without a social security number.
I still get monthly statements to my home - same address as business years ago - addressed to long closed business - not my name.
I have assets so bankruptcy is not an option.
It seems that someone once told me to ask them to produce the original loan document. Could they find it after all the corporate changes and time passed? Can they enforce it without that?
I would like to keep a good credit score.
QUESTION - Morality aside - what if I stop paying?

 

[Zigner]

About 30 years ago I had a small sole proprietor business. I took out a line of credit for $50,000. At the time I believe it was called a 'signature loan' at the bank that I used for the business.
That business has been gone for more than 20 years.
I tried to find all the mergers etc but I think the bank has been merged / acquired / etc. at least 4 times including an FDIC takeover in the 90s or whenever that was popular. Currently US Bank.
I have drawn on the account from time to time. The last time 2-3 years ago and the balance now is about $40,000.
Online there is no social security number associated with the account. I get year end interest statements without a social security number.
I still get monthly statements to my home - same address as business years ago - addressed to long closed business - not my name.
I have assets so bankruptcy is not an option.
It seems that someone once told me to ask them to produce the original loan document. Could they find it after all the corporate changes and time passed? Can they enforce it without that?
I would like to keep a good credit score.
QUESTION - Morality aside - what if I stop paying?

Then you get sued and lose that good credit score.

 

[adjusterjack]

It seems that someone once told me to ask them to produce the original loan document.

That's a bit of a myth. There are plenty of ways to prove that you are the one obligated on the loan, not the least of which is that "you" drew out money 2 or 3 years ago.

That you took money from the line of credit, knowing the business no longer existed, could be seen as fraud and subject you to prosecution.

what if I stop paying?

Now you know what could happen. Up to you.

 

[zddoodah]

I have assets so bankruptcy is not an option.

Almost everyone who has ever filed BK has assets, so I'm not sure why you think having assets makes BK not an option. Did you mean that your assets are so substantial that you don't qualify to file either a Ch. 7 or Ch. 13? If that's the case, then why even mention BK?

It seems that someone once told me to ask them to produce the original loan document.

For what purpose?

Could they find it after all the corporate changes and time passed?

How could we possibly know?

Can they enforce it without that?

Yes.

what if I stop paying?

Your credit score will go down. You'll get sued and likely lose and have a judgment against you, and the creditor will seek to enforce the judgment.

 

[adjusterjack]

Your credit score will go down. You'll get sued and likely lose and have a judgment against you, and the creditor will seek to enforce the judgment.

And by then the debt is likely to be $50,000 to $60,000 and continue to grow with interest, fees, and costs.

 

[army judge]

I would like to keep a good credit score.
QUESTION - Morality aside - what if I stop paying?

ANSWER: Let us know what happens when you cease sending Caesar his tribute.

I'll take a guess.
This modern day Caesar will sue you.
After all, your Caesar probably knows the whereabouts of YOUR assets!
Choose wisely, mate.

 

[CADavid]

ANSWER: Let us know what happens when you cease sending Caesar his tribute.

I'll take a guess.
This modern day Caesar will sue you.
After all, your Caesar probably knows the whereabouts of YOUR assets!
Choose wisely, mate.

Thanks guys. I get it.
BTW - Why did I mention BK? In order to simplify and not have answers about that.

 

[Zigner]

Thanks guys. I get it.
BTW - Why did I mention BK? In order to simplify and not have answers about that.

If the lender (successfully) argues that your transactions constitute fraud, then BK might not help you.

 

[welkin]

A sole proprietorship business is you. You signed for the loan. It doesn't matter that the statements are addressed to the business name.

Was there a draw period or was the LOC open-ended?

 

[Tax Counsel]

I have assets so bankruptcy is not an option.

If by this you mean you have the assets to pay, then just pay them what you owe. It's the right thing to do and the least costly thing in the end.

It seems that someone once told me to ask them to produce the original loan document. Could they find it after all the corporate changes and time passed? Can they enforce it without that?

The only one who could tell you if it has the original note is US Bank. Whether it can enforce the loan without the original note depends on what evidence the bank can produce that would show the loan was made and the terms. There are other ways to prove it. Besides are you really prepared to get on the stand in court and lie and say you didn't take out the loans and possibly run the risk of perjury charges? And if you do, how will you explain the payments you have made without also committing perjury? That'll hurt you more than a ding on a credit score would.

I suggest you see a lawyer to explore your options. Perhaps there is some statute of limitations claim or other defense that would at least reduce what is owed. The history of the loan and the payments may make a difference.

I would like to keep a good credit score.

Paying the loan on time is the way you do that. Stop paying and your credit will start dropping in 60 days or less (assuming this lender is one that promptly reports delinquencies), and keep getting worse the longer you don't pay.