script type="application/ld+json"> { "@context": "http://schema.org", "@type": "Product", "name": "Delancey Street", "aggregateRating": { "@type": "AggregateRating", "ratingValue": "5", "reviewCount": "10" } } Massachusetts Business Debt Settlement Lawyers | Delancey Street

Looking for business debt relief services? Visit Delancey Street.

Business Debt Settlement: An Overview

Dealing with business debt can be overwhelming. Unpaid bills pile up, creditors call nonstop, and you feel like you’re drowning with no relief in sight. But there are solutions available to find your way out of debt, restore your financial health, and move forward on steadier ground. Business debt settlement may be an option worth exploring.

What is Business Debt Settlement?

Business debt settlement involves negotiating with creditors to pay off debts for less than the full amount owed. A debt settlement company works on your behalf to put together a settlement offer, usually for 30-50% of what you owe, to fully resolve what you owe. If creditors accept the offer, your debts are considered settled and you are no longer responsible for paying the full balances.

Key Things to Know About Business Debt Settlement

  • You stop making payments while settlement negotiations happen. This allows you to accumulate funds to pay settlements.
  • Your credit score will drop and creditors may take collection actions during this time.
  • Settling debts has tax consequences. The unpaid portion of settled debt may be considered taxable income.
  • Not all creditors accept settlement offers. Outcomes depend case-by-case.
  • Fees range from 15-25% of enrolled debt or $2,000+, whichever is less.

When Does Business Debt Settlement Make Sense?

If your business is facing unmanageable debt burdens that feel impossible to overcome, debt settlement may be a viable path forward. Here are signs it could help:

  • You owe $10k or more in business debt
  • Your debts are either in default or likely to default soon
  • You have some funds available to pay settlements
  • You anticipate issues paying debts for several more months

Settlement works best for businesses facing serious financial hardships but with ability to access some capital to fund settlements. It requires stopping payments temporarily until negotiations finish.

Step-by-Step Overview of the Business Debt Settlement Process

If you move forward with settlement, here is a breakdown of what you can expect:

See also  How to Negotiate a Release of a UCC Lien When Selling Business Assets

1. Free Consultation

  • A debt settlement company will conduct an in-depth review of your business finances to gain clarity on the full scope of debts owed. This allows them to provide specific advice tailored to your unique situation.

2. Client Agreement & Retainer

  • Once you decide to enroll in the program, you’ll complete intake paperwork like a client agreement and provide a retainer (funds held in a dedicated account used to pay settlements).

3. Stop Making Payments to Creditors

  • At this stage, you’ll stop making monthly payments to creditors. This pause allows you to stockpile funds to use for settlement offers. During this period, expect frequent calls from creditors as they try collecting on past due balances.

4. Settlement Negotiations

  • Settlement specialists will start negotiating with your creditors. Most settlements end up between 30-50% of the amount owed. Negotiations happen one debt at a time and typically take 3-6 months per account to finalize.

5. Settlement Offers & Payments

  • As creditors accept settlement proposals, the debt relief company disburses retainer funds to pay off the reduced balances. Each settled debt is closed out for less than you owed.

6. Changed Payment Terms

  • If any accounts aren’t settled after 36 months, your debt relief provider transitions them into a monthly payment program so they don’t go unpaid.

7. Debt Free

  • Over time, as negotiations conclude and settlements are paid out of your dedicated retainer account, you become debt-free for a fraction of what you originally owed across all eligible enrolled business debts.

Pros & Cons of Business Debt Settlement

Business debt settlement can be an effective way to resolve unmanageable debt burdens, but there are tradeoffs to consider before moving forward:

Pros

  • Settle debts for pennies on the dollar
  • Consolidate multiple debts into one monthly payment
  • Get out of debt much faster than other options
  • Save significant money compared to bankruptcy
  • Avoid business assets being seized or liquidated
See also  Fort Worth Business Debt Settlement Lawyers

Cons

  • Hurt business credit score short term
  • Get frequent calls from creditors while not making payments
  • Wait several months for all negotiations to conclude
  • Potential tax consequences on settled debt
  • No guarantee all creditors will settle

As this overview of the major pros and cons reflects, settlement can provide meaningful relief to a business struggling with debt, but does require weathering some difficulties in the short term before seeing the full benefits.

What Debts Can Be Settled?

Many types of business debt can be included in settlement programs:

✅ Credit Cards
✅ Medical Bills
✅ Personal Loans
✅ Business Loans
✅ Commercial Leases
✅ Business Lines of Credit
✅ Past Due Vendor Invoices
✅ JudgmentsH

owever, there are certain debts that cannot be settled due to their underlying nature:

❌ Federal Student Loans
❌ Domestic Support Obligations (Child Support, Alimony)
❌ Recent Tax Debt Owed to IRS
❌ Mortgages
❌ Car LoansRules differ by state, but most business debt settlement providers focus efforts on unsecured debts like credit cards, medical bills, judgments, and vendor invoices.

What Does Business Debt Settlement Cost?

Legitimate debt settlement companies provide services either on a contingency fee basis or for a monthly fee. Here is an overview of typical fee structures:

Contingency Model

  • No upfront fees
  • The company earns 15-25% of each debt enrolled, deducted from settlement payments

Example: For a $10,000 debt settled for $4,000, the fee would be $1,000 or 25% of the $4,000 settlement.

Monthly Fee

  • Cost either a monthly fee like $100 or a percentage of total enrolled debt
  • Capped at total savings amount or $2,000+ over 36 months

Reputable companies offer fee waivers for consumers facing financial hardships. Make sure to understand the full costs before signing up.

Warning Signs of Debt Settlement Scams

While debt settlement can provide meaningful relief from overwhelming business debts, numerous scammers in the industry take advantage of vulnerable companies. Be on high alert for these common red flags:

See also  How can I challenge the validity or enforceability of a UCC lien?

✘ Requires large upfront fees before settling any debts

✘ Takes monthly fees before making progress settling debt✘ Makes unrealistic promises to eliminate debt in very short timeframe

✘ Pressures you to enroll on first call

✘ Has primarily negative online reviews

✘ Isn’t transparent communicating full costs and risks

✘ Claims special methods for deleting debt entirelyIf you notice one or more of these warning signs, avoid signing up and look for a reputable alternative.

How to Choose a Trustworthy Debt Settlement Company

With debt settlement scams abundant, it is crucial to vet providers thoroughly before moving forward. Here are tips finding a legitimate, reliable business debt relief provider:

  • Check credentials & certifications – Choose an Accredited Business (BBB), member of the American Fair Credit Council, or the International Association of Professional Debt Arbitrators.
  • Read online reviews – Credible companies have largely positive third-party reviews on sites like Google, BBB, Trustpilot, etc. Be wary of totally negative or totally positive review patterns.
  • Compare multiple settlement services – Get free consultations with 3-5 settlement providers before deciding. Ask lots of questions and go with the company you feel most comfortable working with.
  • Understand full costs – Make sure to get fee details in writing so you know exactly what to expect cost-wise from start to finish.
  • Look for experience helping businesses – Opt for a service with a strong track record specifically settling business tax relief cases like yours. Expertise and results matter.

While debt settlement involves effort and tradeoffs, partnering with a reputable company can help businesses finally break free from unmanageable debt burdens and regain financial control. Reach out today to discuss your unique situation and see if settlement may be a viable path forward toward stability

 

[youtube-feed feed=1]

[custom-twitter-feeds feed=1]

Delancey Street is here for you

Our team is available always to help you. Regardless of whether you need advice, or just want to run a scenario by us. We take pride in the fact our team loves working with our clients - and truly cares about their financial and mental wellbeing.

"Super fast, and super courteous, Delancey Street is amazing"
Leo
$500,000 MCA Restructured Over 3 Years
"Thanks for helping me in literally 24 hours"
Jason
$250,000 SBA Loan Offer in Compromise
"Great choice for business owners who need a trustworthy partner"
Mary
$350,000 MCA Restructured Over 2 Years

In The Media

Delancey Street CEO discusses ways to reward employees
Delancey Street CEO discusses the benefits of franchising on Forbes.
Delancey Street CEO discusses management on AMEX.
Beat Ctc Debt Collector

  Crush That CTC Debt Collector: A Merciless Gameplan They’re…

Is Pacific Debt Relief a reputable debt relief company?

  Is Pacific Debt Relief a Reputable Debt Relief Company?…

How is it possible for a bad credit to be fixed?

  Climbing Out of the Bad Credit Hole Sick of…

What is the effect of an AR factor on cash flow?

  The Brutal Truth: How AR Eats Into Your Cash…

What are the best credit card debt relief options?

  Crushing Credit Card Debt? Explore These Relief Pathways If…

Delancey Street simply gets it. You're talking to experts.
Steven Norris
Get Help Today

Ready To Get Started?

If you have questions, feel free to shoot us an email, or fill out our live chat.

Schedule Consultation