Business Debt Relief Matters
Businesses build up debt all the time in order to grow, or sometimes to stay alive. Sometimes, it’s a toxic amount of high-interest loans, credit card balances, or merchant cash advances. Regardless of the situation—business owners across the country struggle with business debt and staying afloat. At DelanceyStreet.com, we want to show you how business debt relief companies work. Our goal in the article is to help you understand what they do, how they charge, and why you should consider working with a business debt relief company. Delancey Street is a business debt relief company, and we’ve saved 100’s of businesses nationwide.
What Is a Business Debt Relief Company?
A business debt relief company is a company that helps businesses handle or reduce their unsecured business debt. Usually, these companies talk to your creditors—like merchant cash advance lenders, SBA loan lenders, or credit card issuers—and try to get you better repayment terms or reduce how much you owe.
- Many lenders want to get their money back. They often prefer working out a plan instead of forcing a default, because going to court is costly and time-consuming.
- A debt relief company bridges the gap between you and the lender, so both sides can find a workable solution.
- Business debt relief companies will usually lower your factor/interest, get you a reduction in the balance, and work on extending the term
- Most importantly – they handle everything, including legal issues, etc
Legal Implications: Understanding the Risks
If you don’t pay on time, lenders often send notices of default. Some may even use a COJ (confession of judgment)—which allows them to collect without a long court process. If you ignore the COJ, or the default notice, you could face:
- Frozen bank accounts
- Property liens
- Wage garnishments
Penalties vary by state. You can read more about your state’s rules on SBA.gov or see the Federal Trade Commission’s guidelines about fair debt collection. It’s crucial not to ignore lenders, because they have ways to get their money if you don’t pay. From a lender’s point of view, they gave you money and expect you to pay them back. If the business debt relief company says you might pay less, lenders may feel it’s unfair and will work to get their total funds back with punitive penalties. From your point of view, cash flow can be strangled by overwhelming monthly payments. Regardless of the side you look at, working out a solution can help both parties. Everyone wants to stay out of court.
Strategies for Defense and Resolution
If lenders push lawsuits or demand fast payment, a business debt relief company can:
- Negotiate a settlement or new payment plan that takes over the original agreement
- Defend you if the lender sues you in court, often they’ll sue you in NY or Florida
- Spot potential pitfalls, like rising interest
- Use invoice factoring or other cheaper forms of credit to ease your debt
If a lawsuit happens, we check the contracts, make sure interest rates aren’t usurious, and confirm the lender followed state laws. We can sometimes tear down the lender’s claim if they broke the rules. At the very least, we will respond to the lawsuit they file – so you don’t have to worry about it. We will handle the litigation while negotiating a new settlement/resolution for you.
Penalties and Relevant Laws
- Some state usury laws say excessive interest rates are not allowed.
- The Federal Trade Commission might punish unfair collection tactics.
- Failing to pay taxes or misreporting debt forgiveness can lead to trouble with the IRS. Learn more at IRS.gov.
Practical Example
Imagine you have a few merchant cash advances. The daily payments make it impossible to cover your bills. You get notices of default, and lenders threaten legal action. A debt relief company can step in, suggest consolidation or settlement, and cut down your overall burden. Lenders want at least some repayment, so they often negotiate rather than get nothing.
Delancey Street’s Approach
At DelanceyStreet.com, we’ve been AS SEEN ON major media. Our team is EXPERIENCED and DEDICATED to helping you succeed.
We always:
- Contact lenders right away
- Gather your paperwork to see your total finances
- Build a plan that matches your cash flow and goals
We work with our sister law firm, led by Steven Raiser. If you need legal defense, we have you covered.
Key Outcomes You Can Expect
- Reduced total debt
- Lower interest rates and longer repayment plans
- Avoiding bankruptcy or closure
- More cash flow to put back into your company
Be aware: if you settle a debt for less than you owe, the IRS may treat the difference as taxable income. Speak with a tax expert for details.