The business debt settlement is supposed to be the most feasible option for your business instead of opting to file for bankruptcy. Even though bankruptcy would imply that you do not require paying for your business’s debts any longer, you can understand that there is little scope for your credit score to rise again.
Debt settlement is fundamentally an approach wherein you and your creditors agree on a slashed balance that would be regarded as payment in full. The reduced balance would be spread over a specified time span that both the parties are happy about.
Benefits of Business Debt Settlement
The greatest advantage of debt settlement for your small business is that your company would not require opting for bankruptcy. However, business debt settlement promises a host of other benefits. These would be including the following:
- Definite Increase in Cash Flow: When a small business has a huge debt, its cash flow is bound to get reduced. Thanks to the business debt settlement program, a major portion of the debt would be forgiven that would automatically mean a boost in cash flow.
- Unnecessary Fees Are Eliminated: Now you could easily avoid unnecessary fees with business debt settlement. When your small business debts are settled, you would no longer need to pay exorbitant attorney’s fees and such other fees.
- Stress-free Life & Sound Sleep: Once your business debts are settled, you could enjoy a sound sleep at night as your stress levels dip and you no longer need to worry about the ever-mounting debts.
Business Debt Settlement Process
Let us explore the steps that would help you effectively settle all your business debts.
- Ensure that all your means and endeavors for repaying your business debt have been exhausted.
- You need to convince the creditors and show them a proof that you are not in a position to pay up your business debt. You could do this simply by calculating DIR or debt-to-income-ratio.
- Once you have calculated your DIR, you may get in touch with your creditor to start negotiations. You must try to speak to a business debt counselor and not a customer service representative because your aim is to talk about debt settlement. Browse through debt settlement reviews for gaining more knowledge and for perfect solutions.
- Once they send you their settlement offer, you may send them your settlement proposal. However, you must keep in mind that you are not in a position to haggle too much. You are fortunate that your creditor has agreed to consider a debt settlement.
- Once you have arrived at an agreement over the amount, you must get the official debt settlement agreement reviewed by a professional, either an accountant or a lawyer to look for any loopholes.
The business debt settlement comes as a true relief but this experience must teach you a lesson to avoid situations that could culminate in incurring large debts. Even though a portion of your debt has been excused, it does not in any way alter the fact that a huge amount of money had to be paid for erasing the debt. Avoid spending more than what exactly your business could afford. It is of utmost importance to spend money smartly so that another business debt settlement situation does not arise again.