New York Business Debt Relief Lawyers
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Running a business in New York can be tough, especially when it comes to managing debt. Many small business owners have found themselves struggling with high-interest loans, merchant cash advances, credit cards, and other debts that become difficult to repay. If this sounds familiar, you may want to consider working with a New York business debt relief lawyer to help you negotiate and settle your business debts.
Why Settle Business Debts?
Debt settlement can be a smart move for business owners who have borrowed more than they can realistically pay back. According to the Small Business Administration, around 50% of small businesses fail within the first 5 years
. Taking on too much debt is often a contributing factor.Settling your debts through a lawyer has several potential benefits:
- Avoid bankruptcy or going out of business: If your business is at risk of shutting down due to debts, settling for less than you owe could allow you to stay afloat.
- Save money: Debt settlement can cost a fraction of the original debt amount. This saves you money compared to paying in full.
- Stop collections: A lawyer can get debt collectors to stop contacting you directly about the debt. This takes the stress off you.
- Protect personal assets: If your business is going under, settling debts can prevent creditors from coming after your personal belongings.
- Avoid legal expenses: Drawing out the debt collection process through court can rack up legal fees. Creditors may settle quickly to avoid these costs.
How Does Business Debt Settlement Work?
The process typically involves several steps:
- You stop making payments on the debt. This shows creditors you’re unable to pay.
- Your lawyer notifies the creditor that you want to settle the debt for less than you owe.
- You contribute money to an account each month until there’s enough to make a settlement offer.
- Once the creditor agrees to settle, they provide written confirmation that the remaining balance is forgiven.
- You pay the negotiated settlement amount as a lump sum.
This process can take anywhere from a few months to a couple of years depending on your specific situation. Having an experienced lawyer handle negotiations improves your chances of success.
Common Types of Business Debt
Some of the most common types of business debt that lawyers can help settle include:
- Merchant cash advances: These high-interest, short-term loans are paid back through a percentage of daily credit card sales. They can be difficult to repay fully.
- Business credit cards: Credit card debt tends to have high interest rates. Minimum payments barely cover the accruing interest.
- Business loans: Term loans from banks or online lenders often have reasonable rates but large balances.
- Accounts payable: Money owed to vendors and suppliers for goods or services.
- Commercial leases: Rent owed for retail spaces, warehouses, offices, etc.
- Business taxes: Payroll taxes, sales tax, and other taxes owed to the government.
- Judgments: Debts that creditors have won judgments for in court.
- Personal guarantees: If you personally guaranteed any business loans, you could be on the hook even if your company shuts down.
Finding the Right Business Debt Relief Lawyer
Settling business debt can get extremely complicated, especially when dealing with aggressive collectors. Working with an experienced lawyer is highly recommended. Here‘s what to look for:
- Specialization in business debt relief: Look for someone who focuses specifically on representing business owners in debt settlement negotiations.
- Good standing and reputation: Verify they are licensed in NY and have a solid reputation through online reviews.
- Reasonable fees: Avoid lawyers who charge hourly. Look for flat rates or fees based on percentage of debt reduced.
- Responsive communication: They should be available to answer your questions and keep you updated throughout the process.
- Empathy: The lawyer should demonstrate understanding of the stress debt puts on business owners.
- Results: Look for a strong track record of achieving favorable settlements for business clients.
The Debt Settlement Process Step-By-Step
If you decide to move forward with a business debt relief lawyer, here is a general overview of what you can expect:
- Initial consultation: The lawyer will review your situation, debts, goals, and options. This helps them formulate a settlement strategy.
- Paperwork and retainer: If you decide to hire the lawyer, you’ll provide details about your debts and sign a retainer agreement.
- Notifications: The lawyer will notify your creditors and collectors that you are represented and wish to settle.
- Saving: You contribute to a dedicated account each month to save up funds to make settlement offers.
- Negotiations: The lawyer leverages your situation to negotiate with creditors for reduced payoffs.
- Settlements: As creditors accept deals, you pay the negotiated amounts from your savings.
- Forgiveness: Creditors provide written confirmation that your remaining balances are forgiven.
- Conclusion: Once all debts are settled, the lawyer closes out your case. Your credit can start to recover.