New York Business Debt Relief Lawyers: How They Can Help Your Small Business
Running a small business in New York can be extremely challenging, especially when it comes to managing finances and debt. Many entrepreneurs struggle with business loans, credit cards, and other debts that become difficult to repay. If you find yourself in this situation, working with a New York business debt relief lawyer may help you negotiate and settle your debts–ultimately saving your business.This article will provide an overview of business debt relief and how lawyers can assist, common types of business debt, and the debt settlement process. We’ll also discuss the benefits of hiring an attorney and what to expect if you move forward with debt relief.
An Introduction to Business Debt Relief
Debt relief refers to strategies that can reduce, restructure, or even eliminate business debt obligations. The most common debt relief solutions include:
-- Debt consolidation – Combining multiple debts into one new loan with lower interest
- Debt negotiation – Working with creditors to reduce the total amount owed
- Debt settlement – Agreeing to pay a lump sum that is less than the full balance
- Bankruptcy – Legally eliminating debt obligations through Chapter 7 or Chapter 11
For many small business owners, debt settlement tends to be the most practical option. This involves working with creditors and collection agencies to pay a percentage of what you owe in exchange for forgiving the remainder of the balance.While it‘s possible to attempt settling debt on your own, the process is often tricky and complex. Business debt relief lawyers have experience negotiating with creditors and can take care of the legwork for you. Their knowledge of debt collection laws also helps ensure your rights are protected throughout the process.
Common Types of Business Debt
Some of the most common sources of debt that New York small business owners take on include:
- Business Loans – Term loans, SBA loans, business lines of credit
- Merchant Cash Advances – A form of business financing based on future credit card sales
- Equipment Financing – Loans to purchase necessary equipment, machinery, vehicles
- Business Credit Cards – Credit cards in the business’s name, both secured and unsecured
- Accounts Payable – Money owed to vendors and suppliers for goods/services
- Commercial Mortgages – Loans to purchase commercial real estate property
- Unpaid Payroll Taxes – Payroll taxes withheld from employees that haven’t been paid
- Personal Guarantees – Personal responsibility for business debts, like co-signing a loan
If you’ve fallen behind on any of these debts, a business debt relief lawyer can help you address them through settlement or other arrangements.
How Does Debt Settlement Work?
The debt settlement process involves several key steps:
-- Stop making payments – You’ll stop making payments so funds can be set aside for settlement offers. This may negatively impact your credit but is necessary.
- Open settlement account – Work with your lawyer to open an account and start setting aside lump sum savings for settlements.
- Negotiate with creditors – The attorney handles all communication and negotiations with creditors. They’ll leverage your situation to get ideal settlements.
- Make settlement offers – Once sufficient funds are saved up, your lawyer will extend settlement offers to creditors. This is often 30-50% of the balance.
- Get settlement agreements – If creditors accept the offer, they’ll provide a written settlement agreement releasing you from further liability.
- Pay settlements – Finally, you’ll pay the agreed-upon settlement amounts from your dedicated savings account.
This allows you to resolve debts for pennies on the dollar compared to what you originally owed. The whole process usually takes around 24-48 months from start to finish.
Benefits of Hiring a Business Debt Relief Lawyer
Attempting to negotiate business debt on your own can be extremely difficult, especially when emotions and finances are running high. Business debt relief lawyers provide valuable expertise and assistance:
- Industry Experience – They understand how creditors and collection agencies operate and have existing relationships. This helps facilitate faster and better settlements.
- Emotional Buffer – Lawyers act as middlemen so you don’t have to directly interact with creditors. This reduces stress and anxiety.
- Expert Negotiators – Attorneys are experienced negotiators. They know how to leverage your situation to get ideal settlements.
- Protect Your Rights – Lawyers ensure creditors follow debt collection laws. They can stop harassment.
- Save You Money – Hiring an attorney can save you more in the long run through better settlements.
- Manage the Process – They handle all the legwork like correspondence and documentation.
Without professional guidance, the debt relief process usually doesn‘t go smoothly and can leave you in worse shape.