Small Business Debt Relief Tips - How Debt Settlement Programs Can Help A Small Business

Feb. 15, 2011 - PRLog -- If you are looking for small business debt relief tips, there is one thing that I will like to say. The debt settlement programs which help the consumers can also help the small businesses. This is because of the fact that the settlement programs for individual consumers and start up businesses are the same. They operate in a same way for both. As an owner of a business, you will have to hire a professional firm for settlement and then the negotiator from the firm, on behalf of the business, will negotiate with the lender for debt forgiveness.

Digging further deep into the method:

The business unit needs to go delinquent when the negotiator advises to do so. The creditor the decides to wait for 12-16 weeks because when the business goes delinquent, the negotiator actually sends a settlement offer letter. After the period of 12-16 weeks, the creditor decides to sell the debt to a collection agency. The loan is sold at a rate of 20 to 30 cents per dollar. The negotiator knows when this happens and the contacts the creditor in person or over the phone. This is where the negotiation starts.

The creditor gets an offer of 30% to 50% repayment. The goodies package involved in the offer is that the payment will be made in bulk at the end of the settlement. The negotiator makes sure that the creditor agrees to the deal by using the bankruptcy threat. The creditor then actually agrees and cancels the contract with the collection agency and forgives at least half of the dues that the small business has. The business unit then needs to repay the remaining amount in bulk and move out of the financial liabilities. This is how debt settlement programs can help a small business.

Debt settlement can make financial sense for consumers and small businesses that are experiencing a financial hardship and have at least $10k in unsecured debt. It is not the only option however. Check out the following link to speak with a debt relief specialist that can go over all your options for free.

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