If a financial institution is dissolved and you still owe them, what happens to the debt?
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If a financial institution is dissolved and you still owe them, what happens to the debt?
The financial company that gave me my student loan has been dissolved without any notice (my state requires that info to be public) so I stopped making payments. A few months later the previous owner of the school contacted me and said that I had to start making payments to him. This sounded suspicious so I did some research and I ignored it but now he is threatening to sue.
Asked on January 9, 2012 under Bankruptcy Law, Florida
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If the financial institution that you owe money to has been dissolved and is no longer in business, then you do not have an obligation to pay the entity unless its representative contacts you about payment and provides documentation showing that he or she is entitled to make the inquiry on behalf of the dissolved entity's behalf.
Many times when entities are dissolved, assets are sold to people and other companies. This may be the situation you are being confronted with. However, if there was an actual sale of an assets by the dissolved financial institution, there would be a written document showing the sale of such assets and price paid. In your situation, I would ask for such documentation to be provided you before any payment is made.
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