Business Bankruptcy Alternatives
Here are some alternatives to bankruptcy caused by too much debt that a business that may consider:
- One-time payment debt settlement: This involves negotiating with creditors to accept a lump sum payment that is less than the total amount owed in exchange for settling the debt. This can be a good option for businesses with a one-time influx of cash who want to resolve their debts quickly.
- Debt settlement with payments: Similar to a one-time payment debt settlement, this option involves negotiating with creditors to accept a reduced payment over time in exchange for settling the debt. This can be a good option for businesses that need more funds to pay the total amount owed upfront but can make regular payments to resolve their debts.
- Debt consolidation involves taking out a loan to pay off multiple outstanding debts, resulting in a single monthly payment to the lender. This can be a good option for businesses that want to simplify their finances and reduce their monthly debt payments.
- Debt restructuring: This involves negotiating with creditors to change the terms of the debt, such as the interest rate or repayment schedule, to make the debt more manageable. This can be a good option for businesses struggling to make regular debt payments but can afford to pay a reduced amount over a more extended period.
- Debt negotiation involves negotiating with creditors to reduce the amount owed on a debt. This is a good option for businesses that cannot pay the full amount owed and want to reduce the amount they owe.
- Credit counseling involves working with a financial advisor or credit counselor to develop a plan to pay off debts and improve financial management skills. This can be a good option for businesses that need help creating a plan to get out of debt and improve their financial health.
- Hiring a business debt settlement company: This involves hiring a company specializing in negotiating with creditors to reduce the debt owed. These companies typically charge a fee for their services, and the business will be responsible for paying this fee in addition to the reduced amount of negotiated debt. It can be a good option for companies that need more time or resources to deal with creditors themselves and want the assistance of a professional. It is vital to carefully research and compare different debt settlement companies before hiring one, as some may not have a good track record or may charge excessive fees.
Downsides when hiring a business debt settlement company:
- Fees: Debt settlement companies typically charge a fee for their services, which can be substantial. Fees are typically a percentage of the total amount of debt against what will be reduced in the settlement. The business may end up paying more than the reduced amount of negotiated debt, which can be a significant financial burden.
- Inexperienced or untrained staff: Some debt settlement companies may not have fully trained or experienced staff, which can lead to mistakes or fruitless negotiations with creditors.
- Agent turnover: If the business is working with a specific agent at the debt settlement company, there is a risk that the agent may leave the company or get assigned to another client during the negotiation process. It can disrupt the process and confuse communications.
- Priority is given to higher-paying clients: Some debt settlement companies may prioritize clients who are paying higher fees or have more debt, which means that the business may not receive the same level of attention or service.
- Lack of systems to track progress: Some debt settlement companies may not have systems to track the negotiation process progress. It will make it difficult for the business to know what is happening with their debts and whether the company is making progress on resolving them.
Why take our online business debt settlement course?
- Cost: An online business debt settlement course is far more affordable than hiring a debt settlement company or hiring a lawyer.
- Control: By taking our course, you will learn the skills and strategies needed to negotiate with creditors and settle debts independently rather than relying on a third party. You keep control over the process and the outcome.
- Improved financial management: The business debt settlement course includes training and systems to track the settlement process allowing you to control every penny and piece of data.
- Avoidance of bankruptcy: Bankruptcy can have severe and long-lasting consequences for a business, including damaging its credit score, potentially leading to the loss of assets, and making it more difficult to obtain credit in the future. You can avoid these negative consequences by taking an online business debt settlement course and learning how to resolve debts without giving in to business bankruptcy.