Health Clinic Case Study Webinar
Business Debt Settlement
See how a small health clinic took its $101,280.00 MCA Debt & negotiated it down to a $10,000 Full Settlement achieved after a judgment was won by their creditor.
Without making daily, weekly, or monthly payments.
The Situation
- Took a Merchant Cash Advance of $150,000.00
- Debt payment schedule = $754.06 per day
- Covid impacted business reducing revenues by 70%
- Debt schedule became impossible to service
Default
The clinic went into default when they had to stop MCA payments.
Challenges
Loss of business made it impossible to service daily, weekly, or monthly debt payments.
Needed to stall the creditor until enough money is raised to offer a significantly reduced settlement amount while continuing to operate.
July – Debt Settlement Process Begins
7/8 > Email sent
Contract and Account Statement requested from creditor.
7/15 > Email sent
Account Statement and Contract requested from creditor again.
7/30 > Notified
Creditor filed suit in Arlington VA court outside of debtor’s state as VA is favorable to confession of judgments.
7/30 > Email sent
Account Statement and Contract requested from creditor again.
Total of 3 emails sent
Total work for the month = 15 minutes
Between July and January Total Time Spent for Workout:
- 34 emails sent
- 1 letter sent
- 0 Phone calls
Total time =
9.5 hours
| 1. Funding Date | Dec 18, 2018 |
|---|---|
| 2. Default Date | May 7, 2020 |
| Original Funding | $150,000.00 |
| Receivables Sold | $186,783.14 |
| Amount Paid Pre-Default | $70,881.72 |
| Amount Owed Pre-Default | $79,118.38 |
| Amount Owed Post-Default | $101,281.90 |
| Litigation Status | Lawsuit filed on 7/30/20 & on 9/17/20 won a judgment for $101,281.90 -terminated upon settlement. |
| Case Duration Since Debtor’s First Settlement Offer | 3 months |
| Date of Debtor’s First Settlement Offer | Oct. 5, 2020 |
| Settlement Agreement Amount – 12/01/20 | $10,000.00 |
| Amount Saved | $91,281.90 |
| % Saved | 90.2% |
| % Of Payout | 9.80% |