Debt can become an overwhelming burden for Florida business owners. Unpaid invoices, legal judgments, tax liens, unpaid payroll taxes, and business loans can all contribute to mounting business debt. While debt is often a normal part of doing business, when it becomes unmanageable it can threaten the survival of your company.Fortunately, Florida has laws and programs in place to help business owners find debt relief. Working with an experienced Florida business debt relief lawyer can help you understand your options and develop an effective debt elimination strategy. This article provides an overview of Florida’s business debt relief laws and programs, common debt problems facing Florida businesses, and how a knowledgeable lawyer can guide you through the complex process of eliminating business debt.
For many businesses facing extreme debt, filing for bankruptcy may be the most effective path to eliminating debt and getting a fresh start. Florida has adopted the federal bankruptcy code, meaning business owners can file under Chapter 7, Chapter 11, or Chapter 13 bankruptcy. Each chapter has different debt elimination strategies:
The type of bankruptcy you file depends on your business structure, amount of assets, and whether you want to continue operating. Your lawyer will assess your situation to determine the optimal strategy.While bankruptcy can eliminate substantial business debt, it also comes with downsides. Bankruptcy can hurt your business’ credit and reputation, and requires disclosing sensitive financial information. Many owners only consider bankruptcy as a last resort when other options have failed.
If bankruptcy seems too extreme, Florida also allows debt settlement as an alternative method of debt relief. With debt settlement, your lawyer negotiates directly with creditors to reduce what you owe. Creditors agree to settle for less than the full amount if you can pay in a lump sum or through a short repayment plan.Florida Statute § 817.801 governs how for-profit debt settlement companies can operate in the state. Importantly, settlement companies cannot charge upfront fees before settling any debts. This prevents companies from taking fees without providing results.Debt settlement works best for unsecured debts like credit cards, medical bills, and personal loans. Your lawyer can negotiate these down to 50% or less of what you owe. However, debt settlement has risks, like potential damage to your credit score or being sued by creditors. An attorney experienced with Florida’s debt settlement laws can advise if it’s the right approach.
If unpaid payroll, sales, or income taxes are dragging your business down, you may qualify for Florida tax debt relief. The state offers programs including:
Consult a tax debt lawyer to identify the optimal program for your situation. They can negotiate with the IRS or Florida Department of Revenue on your behalf.
When creditors fail to get paid, they often hire aggressive collection agencies or sue you in court. Florida provides important protections through the Florida Consumer Collection Practices Act and Fair Debt Collection Practices Act.These laws prohibit harassment, threats, calling at unreasonable hours, disclosing debt information to others, and other unfair practices. Collectors can be fined for violations. A debt collection defense lawyer can put an immediate stop to unlawful collection activities.If you are sued by a creditor, Florida’s wage garnishment law limits how much of your paycheck they can seize. For head of household filers, only the amount exceeding 30 times the federal minimum wage is eligible for garnishment. An attorney can further protect your assets using federal and Florida exemption laws.
Eliminating overwhelming business debt is a complex process with high stakes. An experienced Florida business debt attorney brings several invaluable benefits:
If you choose to move forward with legal debt relief, thoroughly research potential attorneys. Look for ones experienced assisting Florida businesses similar to yours. Ask about their specific debt relief strategies and success rates. Meet with several lawyers before deciding who to hire.
Excessive debt doesn’t have to spell the end for your Florida business. While debt relief can be complex, the potential benefits are well worth the effort. Florida provides a variety of laws and programs to help business owners eliminate debt and regain solid financial footing. Partnering with an experienced Florida business debt relief attorney greatly improves your chances of successfully navigating the process. There are always risks and downsides to pursue legal debt relief, but the guidance of a knowledgeable lawyer can help you minimize them. Don’t wait to seek help. The sooner you address unmanageable business debt, the better chance your company has to survive and thrive for years to come.
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