Personal Guarantee on a Credit Card ???

[Westlane]

I worked in the purchasing department of a corporation that closed last year. While I worked there I had a corporate credit card with the business name and my name printed on it (credit card name withheld but sounds like Atlanta). Unfortunetly the business closed without filing for bankruptcy and they did not pay the credit card off.

Now the credit card company is comming after me saying I signed a "personal guarantee"?? I obtained the credit card online and never signed anything and I only used it for corporate purchases while I worked there. Can this be true???

FYI, the credit card company says I owe them $20,000.00 but they will settle for a lump sum of $6,000.00. No way can I pay.

[HHM]

As for the "signing" issue, that is not going to help you in the long run. When you click "accept" during the online application, you are accepting all the terms and conditions of the card, and that type of "digital" signature is just as valid as an actual signature. Thus, it is very possible there could have been a personal guarantee.

However, with most corporate credit cards, its the other way...the employee "gets" the card and the Business guarantees the card. Essentially, the employee is the "primary" and the corp. is "secondary".

In any event, there is a good chance that you are liable for the balance due. But there are too many unknown variables to give you any type of definitive answer. You might have some wiggle room since he only charges were true business charges, and therefore you did not personally benefit from the charges...but you would need to talk to a lawyer in your area to find out for sure.

[CindyLou]

Actually the fact that the company DID NOT file BK is good news! If they had filed then you would have no rescourse to recoup the money. Just because the business closed does not mean the owners are not liable for the debts the business owes. I would contact the business owners ASAP and ask them how they intend to pay this debt in full! If they had filed BK then they would be off the hook and you would be on the hook!!

[Westlane]

You were right. I checked the fine print on the credit issuers website and it stated that if the corporation failed to pay, then the individual whose name appeared on the credit card would be held personally responsible "Personal Guarantee". It also stated how checking the box was the equivelant of my signature.

So Im not sure what to do in the meantime, but if they persue me in court I would either have to countersue my former employer or argue in court how I wasnt aware that I was personally guaranting my employers corporate purchases. After all, there was nothing in this for me so I dont think its fair that I should be the one held responsible.

ps, I wonder if this is affecting my personal credit?