What doI do if a company that I owe a loan to is now out of business?

I owe a loan company and they have been closed down and are under indictment for fraud, etc. I am unable to reach anyone there by phone (disconnected) and want to pay off my debt. What do I do?

Asked on March 28, 2011 under Bankruptcy Law, Arizona

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Well, first you need to find out if your loan was legally binding or if this company needed a license from your state to give you this loan. So, first start with your attorney general and your state agency that handles loans of your type. Now, if you find out the loan was illegal, you may actually not have to pay it back and you can use the court indictments and statutes to send to the credit reporting companies and ask that this be taken off of your credit reports. Make sure you review all four credit reporting agencies (includes Innovis) and file everything in writing. Next, if this is still a viable loan and the company is under fraud, most would simply wait it out and see if your loan is sent to a receiver to collect or to a third party collection agency to collect. The reason you would want to wait is because if you begin paying it off now and send to the address where the company was, you run the risk of it being taken by a stranger and no trace left.


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