When many people start a business, the only financing options available to them are credit cards or personal loans. While this money will allow for the business to get started, it also creates thousands of dollars in high-interest debt that is difficult to pay back. As a result, many business owners start to fall behind on payments or can do no better than make the minimum monthly payments. If you find yourself facing this scenario, you may want to contact a debt settlement company to see if you qualify for help in eliminating your business debt.
Going Nowhere Fast
If you continue to make minimum monthly payments on your credit cards or personal loans, you will be going nowhere fast from a financial perspective. In fact, even after doing this for several years, you will likely find yourself owing even more money than you did at the beginning. Instead of floundering financially, working with a debt settlement company will allow you to take charge of your debt situation and rid yourself of this unnecessary burden. If your debt qualifies for this service, you could possibly be out of debt in as little as two years.
No Need for Bankruptcy
When many small business owners start having severe financial difficulties, they mistakenly think the only option left to them is to declare bankruptcy and close their business. However, if you take a proactive approach to your debt and contact a debt settlement company, you can find out there will be no need to consider bankruptcy or closing your business. Instead, the debt settlement company will negotiate settlements with your creditors on your behalf, often for amounts that are much lower than your current debt totals. Since most creditors want to work out a deal rather than risk getting no money at all from you, you will find you are actually in a much better position than you ever knew.
You Have the Final Say in Negotiations
Once you sign up for debt settlement services, it is crucial that you remember you will always have the final say in the negotiation process. For example, if a negotiator from the debt settlement company contacts you regarding a settlement that has been reached, you have the right to refuse the deal if you so choose. Should this happen, the negotiator will go back to your creditor and attempt to change certain aspects of the settlement. However, it is important to note that in most cases the negotiator has reached a settlement that should be carefully considered prior to being rejected. After all, while creditors do want to make a deal, they will only go so far before they walk away from negotiations.
Depending on the types of debt you currently have, it is possible that not all of your debt will qualify for relief from a debt settlement company. As an example, if you have accumulated thousands of dollars in tax debt for your business, this type of debt will not qualify for such services. Also, if you are like many people and have substantial student loan debt, a vehicle loan, or past-due mortgage payments, none of these can be eliminated through debt settlement services. As for what can be considered qualifying debt, this includes unsecured debts from credit cards and personal loans that were used to help get your business started. In addition, you must also meet other requirements, such as having the debt listed only in your name, showing you are the sole proprietor of your business, and having a minimum of $7,500 of unsecured business debt.
How Creditors are Paid
Before negotiators will begin talking to creditors on your behalf, you will need to have made monthly payments into an approved savings account that will be used to pay your creditors. Once enough money has accumulated in your account, negotiators will get to work trying to reach settlements with each of your creditors. Upon doing so, you are contacted by the company so that you can officially agree to the terms of the settlement. Once you do, money is then taken from the savings account and passed on to the creditors, resolving the issue.
Debt Settlement Fees
In return for negotiating settlements with creditors on your behalf, the debt settlement company will charge you a fee for its services. While fees can vary from one company to the next, most charge their customers no more than 25% of the total amount of their original debt amount. If this sounds high to you, compare it to the amount of money you are losing each month by simply making the minimum monthly payments on your credit cards or loans. Once you do the math, you will see that even with paying these fees, the amount of money saved overall will far outweigh the fees paid for debt settlement services.
If you believe debt settlement services may be the answer to your business debt problems, get started by going online to fill out an information form about your current debt situation. After doing this and finding you do qualify for such services, you can then speak to a company representative who will explain the service, answer your questions, and help you enroll in the program if you want to do so immediately. By taking charge of your debt situation, you can discover a light at the end of the credit card tunnel.