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Business debt negotiation as an alternative to bankruptcy – A light at the end of the tunnel

7/1/2013

6 Comments

 
Guest blog by Audric Stevens

Business debt negotiation as an alternative to bankruptcy – A light at the end of the tunnel

Filing commercial bankruptcy is a lose-lose decision both for a business and its creditors..  Instead of creditors living in fear that they will get nothing and companies having to close their doors, there is another way to go.  What is in everybody’s interest is a corporate debt settlement or negotiation program that reduces the total debt obligation of the business, or creates doable repayment plans, that insure the survival of the company in the long run. Business debt can cause overwhelming fiscal difficulties and place a business firm in extreme jeopardy. Corporate debt restructuring through a debt negotiation company is a productive solution to eliminate the financial woes and enhance liquidity by establishing equitable distribution among creditors and freeing up the business to realize its goals by lifting the burden of debt.

Comprehending the process of commercial debt settlement

Before a business owner or manager takes a plunge into the debt settlement bandwagon, it is important to understand how the process works. When a business starts a debt settlement program, it will actually have the opportunity to negotiate with creditors in order to present the financial hardship and persuade creditors about an alternative debt repayment structure to facilitate the repayment process. The best part of the negotiation is that the business does not require doing it on its own. Since it has enrolled with the professional debt negotiation company, the business debt consultant will do all the formalities on its behalf.

The professional will make a list of the debts owed by the business, categorize them according to the total principal balance, interest, penalties, and accrued fees.  Based upon the cash flow of the business, the professional debt negotiation company will create a feasible plan to repay the debt and then negotiate with each of the creditors to either reduce the debt, obtain a comfortable installment arrangement to pay the debt over time, and even reduce the debt and obtain comfortable installment terms. The creditors usually agree to the professional’s proposals as the impending threat of losing the entire balance if the business firm were to declare bankruptcy is what motivates them to listen patiently to the requests of the professionals. 

The obvious benefits of settling commercial debts through a professional company

The debt settlement programs of the trustworthy companies implement a proven methodology of savings and negotiation that enable them to resolve business debt quickly and cost-effectively. As business bankruptcy often takes a toll on the business by laying off employees and wiping out the owner’s investment, an alternative program helps breathe a sigh of relief. Here are some benefits of settling debts through a debt negotiation company.
  •    Help compensate the creditors in accordance with what your business firm can afford
  •    Reduce the total outstanding debt and/or stretch the repayment period into fixed,                affordable and single monthly payments
  •    Spend less time dealing with the stress of hungry creditors and the harassing debt                 collection agents
  •     Keep the doors open and rejuvenate the business
  •     Spend more time in optimizing the business and creating revenue by concentrating on         the future and not the past
  •     Avoid redundant and excessive legal fees
  •     Preserve the relationship with vendors and also keep the supply lines open
  •     Maintain a balance between budget, revenue and investment and get a manageable grip      on cash flow
  •      Rebuild credibility and credit, and above all
  •      Avoid filing business bankruptcy
Vital tips on finding the right commercial debt negotiation company
  • Do they have published references: Check if the debt negotiation company has been registered with the Better Business Bureau. The BBB is the yardstick of authenticity and it will be rather foolish to work with a firm that is not accredited by the same.
  • Do they ask for money upfront: Most unauthentic debt negotiation companies demand upfront fees even before reducing a portion of your total outstanding debt level. The FTC considers this illegal for consumer claims and hence you should avoid working with business debt negotiation companies that charge advance fees at the very beginning.
  • Do they ask you to fund settlements before obtaining your consent: Check if the commercial debt consultant asks you to make payments even before receiving your creditor’s consent to the settlement and producing written evidence that a creditor has agreed to the settlement terms.
  • Are the fees reasonable in relation to your financial circumstances: A trustworthy debt negotiation company will take into account your present financial state before charging you their fees. You should, therefore, ensure that the fees make sense with your current economic state.
There are different debt solutions for the businesses to repay debts sooner and make payments more manageable according to their budget.

Audric Stevens is a financial expert and a contemporary writer. He is involved in various online activities through which he imparts financial lessons to people with diverse needs. In addition to that, he is closely working with the ‘debtconsolidationcare community’ at the moment that has several interesting and prudent financial tips for people to use. If you like this article please follow us here.


6 Comments
Fresh Start Solutions link
8/21/2013 03:33:29 pm

Great guest blog here. Thanks for this useful and valuable information!

Reply
michel jonathan link
9/3/2013 04:49:16 am

This is very useful information

Reply
Thiago daLuz
10/17/2013 07:28:49 am

We just started looking at <a href="http://www.harrisandpartnersinc.com/consumer_proposal.html">debt solutions in Toronto</a>. I hope we won't need it as extensively as others have, but it will definitely help.

Reply
Personal Bankruptcy link
11/1/2013 11:45:33 am

furthermore, filing for bankruptcy can actually benefit your credit standing by erasing your debts and delinquency status. an even better advantage is that you can begin to repair your credit right away.promote yourself there are several ways to begin.

Reply
Andrewelex link
3/13/2014 02:36:04 pm

Your post is extremely helpful. I will keep following. Thank you for sharing this information.Your blog provided us useful information to work on.spergel.ca provide you same service. Our Corporate Insolvency practice helps businesses deal with a range of insolvency, restructuring, and turnaround issues across a broad spectrum of industries. Our services include acting as receivers, monitors, consultants, and trustees.
You have done a marvellous job!

Reply
IdealDS link
6/9/2014 06:43:42 pm

Thanks for the such informative post. I love the points discussed about right commercial debt negotiation company. Keep Posting.

Reply



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    Author

    Michael Cohen is the owner of Business Debt Solutions.   He has successfully negotiated the settlement of thousands of business debts for over 20 years.

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