...incorrect, what are everyone's rights? I am interested to know what laws regulate how a lender funds a small business loan. Let's say a corporation needs a startup loan. The corporation is owened by one person however, they have someone that will be a co-borrower (not co-signer). The loan is funded to the personal name of the primary owner (not the business but the owner only). The business and the owner completed a bankruptcy and the loan was discharged. The co-borrower's credit report shows a charge-off loan. 1) The co-borrower never had possesion of the funds (the check was payable to the other party). 2) The check was not payable to the business. Does the co-borrower have a right to dispute the reporting on the credit report on the grounds they never had posession of the funds?

This is a scenario that was presented to me and I wanted to put this out there to see if anyone had a different opinion.

Thanks,
BW