Tampa Business Debt Settlement and Merchant Cash Advance Lawyers
Struggling with business debt in Tampa? You may be able to settle your debts or get relief through legal options.
As a business owner in Tampa, you likely relied on loans, merchant cash advances or credit cards to get your business off the ground. But what happens when you fall behind on payments? Your creditors may slap you with late fees, penalties, higher interest rates – making an already difficult situation feel impossible.
That’s where experienced Tampa business debt settlement and merchant cash advance lawyers can help. Keep reading to learn more about your legal options for finding relief from burdensome business debts.
Understanding Business Debt Settlement
Business debt settlement, also called business debt relief or negotiation, is the process of working with creditors to reduce the amount you owe. A settlement company or attorney negotiates with your creditors to lower your balances, waive fees, reduce interest rates or create a discounted lump sum payoff amount.
For example, if you owe $100,000 across multiple business credit cards and loans, a settlement could negotiate that down to $60,000. You pay the reduced amount as a full and final payment, and the accounts are considered settled.
When To Consider Business Debt Settlement
If you owe $10,000 or more in business debt and are struggling to keep up with minimum payments, settlement may be an option. Common situations where business owners pursue settlement include:
- You fell behind on payments due to financial hardship from COVID-19
- You racked up debt quickly during a growth spurt
- You took on debt to stay afloat during slow seasons
- You struggle with high interest rates from merchant cash advances
Settling debt typically requires a lump sum payment, so you need available funds. Sources can include:
- Business revenue or profits
- Personal savings or assets
- Borrowing money from friends, family or retirement accounts
Without available funds, you may need to consider other options like bankruptcy or debt management plans.
The Business Debt Settlement Process
The settlement process takes between 3-36 months in most cases. Here is what you can expect:
- Stop making payments – You’ll stop paying your creditors so you can save up the settlement amount. This will likely mean defaulting on accounts.
- Open a dedicated account – Your attorney or settlement company will have you open an account to save the negotiated payoff amount. You’ll make monthly contributions until reaching the target.
- Negotiations begin – Your legal team starts negotiations with your creditors. This involves validating your debts and financial situation.
- Creditors accept offer – Once the creditors confirm everything checks out, they will likely accept a discounted lump sum payment. This can take a few rounds of back-and-forth.
- Pay settlement amount – When all creditors accept discounted payoffs, you’ll pay the settlement amount as agreed. Accounts will then be closed and considered settled.
Understanding Merchant Cash Advance Relief
Merchant cash advances provide quick financing based on a percentage of future credit card sales. While convenient at first, the high fees and daily repayments can become extremely burdensome over time.If you struggle to keep up with merchant cash advance payments, an attorney can review your agreement for violations. Common violations include:
- Deceptive claims about costs, fees or rates
- Improper daily repayment amounts
- Excessively high fees
- Failure to provide contract cancellation rights
If violations are found, your attorney can negotiate a settlement or file legal action to invalidate the agreement. This may allow you to walk away from the debt, reduce what you owe or create affordable repayment terms.
What To Look For In A Business Debt Attorney
Settling business debts and merchant cash advances can be complex. An experienced attorney is key to navigating negotiations and legal action. When choosing an attorney, look for:Industry experience – They should have a strong track record specifically with business debt relief cases. This experience leads to better negotiation results.Local knowledge – An attorney familiar with Florida debt laws and creditors can better protect your rights and interests.Reasonable, transparent fees – The best attorneys offer flat-rate or contingency-based fees so costs are controlled.Full legal support – Your attorney should handle negotiations, lawsuits, creditor harassment issues and more from start to finish.Client education – A great attorney educates clients every step of the way so you understand your options, rights and next steps.
Finding the Right Tampa Business Debt Relief Attorney
If you need legal help with business debts or merchant cash advances in Tampa, Delancey Street has experienced local attorneys available to assist. Call 212-210-1851 to learn more.
Can Bankruptcy Help With My Business Debts?
Many struggling Tampa business owners facing extreme debts ask if bankruptcy can provide relief. There are a few options to consider:
Chapter 7 bankruptcy – This liquidates eligible assets to pay creditors. Any remaining debts are discharged. However, those with high incomes may have assets at risk.
Chapter 11 bankruptcy – This restructures debts under court supervision. You keep assets and get breathing room to repay what you can over time. It is complex and expensive.
Chapter 13 bankruptcy – This type is typically used by sole proprietors or independent contractors. It provides 3-5 years to catch up on debts with affordable payment plans.
What Are Common Defenses Against Merchant Cash Advance Lawsuits?
Merchant cash advance companies frequently sue small business owners who get behind on daily repayments. However, certain defenses can defeat these lawsuits.Common defenses include:
Breach of contract – If the company violates repayment terms, interest rates or fees in the agreement, it may nullify their right to collect.
Unconscionability – If the contract contains unreasonably unfair terms and the business lacked understanding of them, a court may rule it invalid.
Usury violations – Merchant cash advances with effective interest rates above 60% violate Florida lending laws. This makes them unenforceable.
Improper debt validation – Companies must provide proof detailing exact amounts owed upon request. Failure to do this can invalidate collection rights.
What Should I Do If I’m Overwhelmed With Business Debt?
Facing extensive business debts while struggling to keep your company afloat can be emotionally and financially devastating. You may feel embarrassed, desperate or hopeless about finding solutions. But know that you have options and do not need to tackle this alone.Here are some steps to take if you feel overwhelmed by creditors, debt collectors and financial hardship:
Talk to someone you trust – Speaking with close friends or family can relieve some immediate stress. Their support and perspective can be invaluable.
Contact a credit counseling agency – Non-profit agencies provide free budgeting, credit guidance and debt management assistance. They help create action plans.
Reach out to creditors – Openly communicate with creditors about your situation. Some may offer hardship options allowing more time to pay.
Consult an attorney – Legal experts can stop harassment, invalidate debts and negotiate settlements. This can eliminate burdens quickly.
Consider debt relief options – Settlement, bankruptcy and debt management can reduce or eliminate balances owed. This lightens loads.
Focus on your mental health ̶ Make self-care, healthy coping strategies and treating conditions like anxiety or depression a priority throughout the process. This helps you tackle challenges with a clear, positive mindset.
