Home Depot Commercial Credit Card

[OilKiller]

Hello All,

Hopefully a lawyer or an accountant can help with this. My business was issued a "commercial credit card" with Home Depot a number of years ago. To date, I have kept this account in good standing. Still not sure why Home Depot would issue a commercial credit card to a software company, but hey, they did.

As it stands, my business is closing it's doors right away. There is still a balance on this card that the business cannot pay for.

As Sole Director of this corporation, am I "personally" responsible for the balance on this card once the corporation closes/dissolves?

Again, it is a commercial credit card issued to the business. The name on the card is the name of the business and the bill comes in the name of the business.

Can anyone help with this? Thanks.

[Mike F]

As far as I know, in general the only things directors will be held personally liable for are unpaid remittences for GST, PST (usually), and other source deductions and unpaid employee wages.

The exception to that would be if the director gave a personal guarantee for the debt.

But once again, free advice on the internet is worth what you paid for it, so if it's a large debt, see an established corporate lawyer.

[OilKiller]

Thanks Mike.

Not sure if there was a personal guarantee or not though. Just curious if anyone else knows if this is something Home Depot goes after or not by default for commercial credit cards.

The card was issue quite a few years ago and I don't remember if there was any type of personal guarantee or not.

[onetwo_threefour]

I'll second what Mike says, but really the issue of whether there is a personal guarantee really is the critical one. There is not likely any other way they can come after you personally outside of a provable fraud.

You might ask around with others that have Commercial accounts and who may still have their original paperwork to see whether a guarantee was in place.

Another idea... in Alberta a gurantee is not valid unless executed with a
Notary Public signing a certificate pursuant to the Guarantees Acknowledgement Act. As such, if you never had to go to a notary to set up your account with Home Depot it's likely that there is no enforceable guarantee.

[OilKiller]

Originally Posted by onetwo_threefour

Another idea... in Alberta a gurantee is not valid unless executed with a
Notary Public signing a certificate pursuant to the Guarantees Acknowledgement Act. As such, if you never had to go to a notary to set up your account with Home Depot it's likely that there is no enforceable guarantee.

Interesting.

Not that I doubt you, but can anyone else confirm this?

I know for a fact I never did anything like that.

[onetwo_threefour]

Originally Posted by OilKiller

Interesting.

Not that I doubt you, but can anyone else confirm this?

I know for a fact I never did anything like that.

One word of caution on that... If you are a co-signor on the account, (i.e. the account is a joint account in your name and the comany's name) then this won't help you. It will onl be of assistance if you're absolutely sure that the account is in the company's name only.


Here's the legislation...

http://www.canlii.org/en/ab/laws/sta...00-c-g-11.html

It's only seven sections long. Section 3 is the most important one for you...

[OilKiller]

Originally Posted by fotze

In that case, lets max that juicy card out, high five. Who needs hardwood?

Leave it to Fotze to say this...

Nah, I'm not trying to run up any debt or do anything wrong here. The company simply is being dissolved and it's a debt it can't pay. I thought it would be able to, it can't.

[Jedi Ninja]

I'm guessing whatever paperwork you signed included some sort of personal gaurantee on your part. It is generally pretty hard to otherwise get credit cards in the name of a small corporation.

[OilKiller]

Originally Posted by Jedi Ninja

I'm guessing whatever paperwork you signed included some sort of personal gaurantee on your part. It is generally pretty hard to otherwise get credit cards in the name of a small corporation.

Well, they did send the card to us. We never applied for it. Who knows...I have to try to dig up the original document.

[Deegee]

Originally Posted by OilKiller

Interesting.

Not that I doubt you, but can anyone else confirm this?

I know for a fact I never did anything like that.

I know that's it's very rare for us (Credit Union) to lend to corporations without guarantees and they always have to take the form to a lawyer to be executed.

The only times we waive getting a guarantee is if it's cash secured borrowing (with the cash on deposit in the company name) or if the security is extremely strong.

I will second the comment that often times the principle ends up cosigning on cards so really they don't need a guarantee because it's a joint debt with the principle and the company.

[OilKiller]

Thanks for the info guys. Guess I will have to try and dig up the original agreement and go from there. Oh well, if I have to pay it personally, so be it. Would rather not, but that's life.

[OilKiller]

You can dissolve a corporation if there are no assets. Of course, if the corporation had money and assets, you can't just send a letter to creditors and say "sorry, we're closed, oh well"...

If creditors are owed, then yes, odds are it is a "bankruptcy" for the business.

[onetwo_threefour]

Originally Posted by fotze

Can you just dissolve a business? Do you have to declare bankruptcy? Surely there has to be more to it that just dissolving a business and then all the creditors just say "oh well"?

I helped a small company once that basically just sent all its stuff back to where they bought it from (equipment, inventory) and shut the doors. If there are creditors out there they likely wouldn't bother petitioning such a company into bankruptcy, because the costs would not be recovered anyway, let alone the money owing.

Kind of a do-it-yourself bankruptcy... Wouldn't work in a lot of cases but did in this particular one.

[OilKiller]

Originally Posted by onetwo_threefour

Kind of a do-it-yourself bankruptcy... Wouldn't work in a lot of cases but did in this particular one.

Exactly.

This bill is under $3000. I don't think Home Depot would care that much of would try to do much about it quite frankly.