What are my chances of winning arbitration against a collection agency who is suing me and my S-corp for a debt that was incurred through my S-corp?

On Monday I go to arbitration for a debt incurred from about 2-3 years ago, around the time the business went under. I never filed bankruptcy because I can’t afford it right now. I am being sued personally and through my S-corp for this debt. My name is on the credit card as president of the corporation; however it is not on my credit report. Also, there were several charges from them for years for some credit protection service that I never agreed to and tried to have removed. They never removed them. I need advice fast. I was really hoping they would cancel but they didn’t.

Asked on October 19, 2011 under Bankruptcy Law, Pennsylvania

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Most likely the plaintiff at this binding arbitration proceeding will try to show that your personal business was not separate from your S corporation so that identity of the corporation and you as a person should be disregarded. If disregarded, then you will be responsible for the credit card debt.

If you dissolved your S corporation you stand a better chance of getting a defense award at the upcoming arbitation.

I cannot give you a legal opinion as to the chances of you defensing the arbitration proceeding in that I have not read the complaint nor do I know the issues claimed at the upocoming proceeding.

You need to realize that the plaintiff bears the burden of proving each of the claims against you personally.

Good luck.


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