What Are My Options to Resolve Business Debt?

Posted By Law Office of Simon Goldenberg, PLLC || 6-Feb-2017

Running a business can be tough, particularly if you’re a small business competing against corporations. Though people take on debt in order to get their businesses off the ground, one of the simplest ways to encounter financial trouble as a business owner is to take on too much debt. Loans and merchant cash advances (MCA debt) can be especially problematic during a stagnant economy. Here are a few options to take if your debt is getting to be too much to deal with.

Restructuring Payments

Sometimes people don’t consider their debtors can be reasonable people. If your payments are getting to be too high, consider talking to your creditors rather than dodging them. Be upfront with your suppliers or your credit-card issuers. They might be used to working with people in financial crises. Talk about the possibility of a new payment plan, or ask them if you can extend the terms to give you extra time to pay. Credit-card issuers would also rather see you continue to succeed rather than go out of business and get nothing at all.

Negotiating to Settle the Debt for Less

Talking to your debtors can also lead to settling the debt for lesser amounts. This is usually done when filing for bankruptcy, but creditors might want to do it ahead of time in order to see your business succeed. If you need help with negotiation, talk to an attorney for assistance. An experienced business debt lawyer can help you work with your creditors instead of going to court.

Take Another Look at Your Budget

Look at where you’re spending your money. If you have extraneous expenditures, consider cutting them in order to save more cash. Look at all your daily expenses and determine what you can save for later. This includes looking at your payroll. Is there a job you could fill in for instead of hiring an employee to do the job? Then, when you’re out of the danger zone, you can hire your employee back.

Selling the Extra

Is there any excess inventory, equipment, or machinery you can do without? What about cars, real estate, or any other unnecessary items? Consider selling what you can. The proceeds can go towards reducing your debt.

Loan or Debt Consolidation

Sometimes part of the problem is minimum monthly payments for several different loans. If you can take out a business loan for the total amount of your debt, you’re left with 1 payment a month with 1 minimum monthly payment to worry about. Debt consolidation works in a similar way. You can work with your creditors to consolidate all of your debts into 1 and negotiate an affordable payment plan. However, this will be reflected on your credit report.

Bankruptcy

One final option you could take is filing for bankruptcy. Chapter 11 bankruptcy allows you to work with your creditors by negotiating a repayment plan. It lasts from 3 to 5 years, during which you continue to make payments on the debt. After 5 years, the remainder of the debt is discharged. Bankruptcy will destroy your credit, but your credit can be built back up later.

If you’re ready to begin resolving your debts, contact our dedicated debt relief attorneys. Our founding lawyer, Simon Goldberg, is a highly rated attorney who understands your legal rights and options for relief. He has studied the nuances of credit scoring and restoration by CreditCRM and has become a Certified Debt Specialist and a Certified Credit Counseling Specialist by the International Association of Professional Debt Arbitrators. He’s passionate about helping people resolve their debt and credit issues. Trust him to have your and your business’s best interests at heart.

Contact us at (888) 301-0584 or fill out our online form to schedule a free initial case consultation today.

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