As an entrepreneur who knew you had a great idea for a business, going into debt to get your company established seemed like a risk worth taking. However, when financial difficulties came along, the debt became a problem that seemed impossible to solve. If you have felt this like and now wonder what can be done to get you and your business back on the right financial path, working with a business debt settlement company may be the solution.
A Way to Save Money
If you are like many other business owners who used personal loans or credit cards to start a business, you are now likely struggling just to make your minimum monthly payments. If you continue on this track, you will wind up throwing away thousands of dollars while still finding yourself in just as bad if not worse financial shape than when you started. However, a debt settlement company can change this trajectory. Instead, you can have experienced negotiators working for you to reach settlements with each of your creditors, saving you thousands of dollars in interest.
A Quicker Solution
As you know by now, you can make monthly payment after monthly payment to a credit card company, only to find yourself making no headway in reducing your debt. Unfortunately, that’s exactly what the credit card companies want you doing for years and years. If you are seeking a quicker solution to your debt problems, a debt settlement company can speed up the process. By working with your creditors to reach agreements that have you paying much less than you would have otherwise, you will start to see your total debt reduce at a much faster rate than you expected. Depending upon how much debt you have, it is possible you could be free of your business debt within three or four years.
Why Creditors Agree to Settlements
Since you may owe a credit card company thousands of dollars, you may be wondering why these companies choose to enter into negotiations with a debt settlement company. Actually, the answer is quite easy. For most credit card companies, customers who start to experience debt problems simply stop making their payments and default on the debt that is owed. As a result, the credit card company will wind up getting no more money. However, by working with a debt settlement company, credit card companies can at least recover a percentage of the debt owed them, making it worth the effort in their minds. Therefore, you have significantly more power over the credit card companies than they want you to believe, so take advantage of it by working with a debt settlement company.
Enrolling in Debt Settlement
When considering whether or not to use debt settlement services, you usually begin by visiting a company website and providing financial information through an online form. If your situation qualifies for such assistance, you then move on to speaking with a company rep about how to enroll in the program, how the service could help your situation, and so forth. During these discussions, always make sure you ask any and all questions you may have about the service and the company itself. If you are uncomfortable during the process and feel as if you are not getting your questions answered to your satisfaction, don’t be afraid to check out other companies.
The Savings Account
Once you are enrolled in a debt settlement program, you will be required to open a savings account that will be used to pay off your debts. As always, do so with a bank or financial institution where the account will be FDIC-insured. Once done, you will then deposit money into the account to use for paying off your debts. Each time the debt settlement company reaches an agreement with one of your creditors, you will be notified so that you can be informed of the agreement’s terms and give the debt settlement company permission to proceed. Within a matter of days, money goes from your savings account to paying the creditor, reducing your debt much faster than you anticipated.
Debt Settlement Fees
Because the debt settlement company is providing you with a valuable service, it will of course need to be paid for its efforts. In most cases, this will mean charging you a fee based on your total amount of debt. Generally, expect to pay fees ranging from 15-25% of your debt total. Yet even with paying these fees, most business owners still come away much better off than if they had tried to pursue other solutions on their own.
Unfortunately, not all debt will qualify for relief from a debt settlement service. For example, student loan debt and tax debt will not qualify for this service, and neither will secured loans such as mortgages or auto loans. However, any unsecured debt such as credit cards or personal loans related to your business will be eligible for relief. Also, you often need to have debt exceeding $7,500, be the sole proprietor of your business, and be able to show the debt you want relief from is listed only in your name.
If you try to take on creditors by yourself, you often get nowhere. To get much better results, put your debt problems in the hands of experienced negotiators who understand how creditors think and can reach reasonable financial settlements for you and your business.