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Using Debt Settlement to Address Cash Flow Problems
Settling debts for less than what’s owed provides a path to eliminating unmanageable repayment burdens. It works by pausing payments so funds can accumulate for settlement offers.Here is an overview of the small business debt settlement process:
- Stop making payments – Halt payments to creditors and redirect income into secure account
- Portfolio review – Attorney negotiates with creditors and identifies best settlement candidates
- Settlement offers – Lenders offered lump-sum discounts to close accounts
- Resolution – Settled accounts report as “Paid in Full” with no further collections
Debt settlement can reduce small business obligations by 40 to 60 percent on average. And by addressing excessive debts that overwhelm cash flow, it helps struggling owners regain their financial footing.However, settlement also comes with risks like temporary credit damage or potential lawsuits. So working with a lawyer experienced in the process is strongly advised. They help navigate risks while maximizing settlement savings.
Key Attorney Services Around Debt Settlement Include:
- Guidance on account selection, settlement strategy, and managing creditor communications
- Review of current debts as well as business practices to avoid repeat situations
- Defending against any legal action taken on past-due accounts
- Negotiating with creditors to reduce balances owed
The Delancey Street team helps small business clients settle debts through a combination of legal leverage and negotiated discounts. Over the past 10+ years, we’ve settled over $250 million in small business debts while defending dozens of lawsuits. Our hands-on approach keeps clients informed while obtaining the maximum relief possible.
What Makes a Good Business Debt Settlement Company?
Business debt settlement provides an alternative to bankruptcy or ongoing collections from debts you can’t afford. But finding a settlement company you can trust is crucial.Here are signs of an ethical, effective settlement firm:
Experienced Legal Team
Your business needs attorneys to actively negotiate settlements and defend against legal action. Ensure any firm has extensive experience in business debt relief.
Reasonable Fees
Avoid companies charging large upfront fees or a percentage of total debts. Ethical firms tie fees directly to savings achieved.
Ongoing Communication
The best firms keep clients updated throughout the process and quickly respond if any collector calls or legal notices appear.
Advice on Improving Finances
Look for settlement paired with guidance on shoring up cash flow and improving business practices to avoid repeat debt situations.At Delancey Street, our debt relief programs check all those boxes and more:
- Extensive experience settling business debts over 10+ years
- Affordable fees based only on savings from settlements
- Hands-on service and legal help from start to finish
- Advice on stabilizing cash flow and finances long-term
We’ve put over $250 million in small business debt to rest while defending dozens of lawsuits. And we extend the same dedicated partnership to every client we work with.
What to Expect From Business Debt Relief Services
Wondering what working with a business debt relief company actually looks like? Here’s an overview of what to expect:
1. Onboarding After a quick eligibility check, an advisor collects information on all outstanding debts and cash flow challenges. Many clients feel immediate relief just from discussing struggles openly without judgment.
2. Account Setup Funds get directed into a dedicated settlement account. Pausing payments shows creditors you can’t afford balances and motivates better settlements.
3. Portfolio Review Experienced attorneys review all debts and contracts in detail. They identify any unlawful lending practices and best accounts to target for settlement.
4. Negotiations The legal team leverages identified weaknesses to negotiate discounted lump sum payoffs with creditors. Halt to payments combined with legal arguments motivate settlements.
5. Settlements Finalized As lump-sum deals get finalized, accounts report as “Paid in Full” with no further collections. Team keeps negotiating until every possible account settles.
6. New Start With business debt addressed, owners work with advisors to shore up cash flow and lock in the financial stability they’ve regained.While each business situation differs, this overview captures the main phases of our relief process from start to finish. And we tailor each engagement to meet the specific needs of the clients we serve.
