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Written by AskTheLawyers.com™ on behalf of David Shuster with Shuster Law, PLLC.
Starting your own business is a very courageous and often complex endeavor. But there are many reasons for why at least half of the small businesses in America might find themselves in financial trouble. If you have already tried calling your primary lender and looked thoroughly into the different types of debt consolidation loans, then perhaps this legal article can help you if you have found that you will need to file for business bankruptcy. We will also touch on the subject of debt relief scams, a growing problem.
There is no one-size-fits-all approach to debt settlement. The goals for most small businesses in a precarious financial situation is to file for Chapter 11 or Chapter 13, but they will have to qualify or those. If they do qualify, these options are usually very helpful because they give businesses the chance to restructure and renegotiate terms for debt collection. However, they are still forms of bankruptcy and there will still be some hefty consequences. Businesses that have no other option but to file for Chapter 7 bankruptcy must also take into account how this will affect their financial future. However, even if Chapter 7 is the only option, it will at least provide a way to ultimately handle the debt.
Thankfully, there is quality assistance out there to help vulnerable borrowers to find their way through this situation and reach their best possible outcome.
When a business is being smothered by debt, the last thing it should do is waste time, but that doesn’t mean make a hasty decision and choose any debt relief agency that just sounds good. Any struggling business owner that chooses to handle their bankruptcy this way will likely come to quickly regret their decision.
Bankruptcy relief scams are a growing problem, and a single internet search brings up a load of businesses that make it sound so easy to handle debt collection, and with guarantees and little to no consequences. But don't be fooled! Some of these seem very official and could even have people claiming to have badge numbers. They could even have a website. The truth is, these quick fixes are often fraudulent and many of these cons have no interest in actually negotiating anything on your behalf.
One example of many is a company called United Debt Counselors. They made bogus claims about what they could do for their clients. They used very official mail-outs that appeared to be legal or from a bank, and fooled people into paying them illegal upfront fees. In the end, the company had to mail out $480,000 back to its customers. The Federal Trade Commission tells us that from July 2016 to June 2017, a total of $6.4 billion was ordered to be refunded back to consumers by so many unscrupulous debt relief companies.
Sadly, this crooked activity robs debt-burdened small businesses not only of money, but also of the chance they would have had to renegotiate in a timely manner before the debts went into default. Words that The Ohio State Law Journal associates with these shady companies are “trashed credit”, “fraudulent”, “abusive”, “deceptive”, and “lawsuit.” The same journal reports that the amount of clients that ever actually receive help is actually less than 10%. Not good odds, right?
A business bankruptcy attorney is simply your best option. Bankruptcy is complicated, and your financial future should be protected, not stolen from for a “fix” that is really no more than a band-aid. Also, not all attorneys are alike, so make sure your lawyer is board certified and state certified for business bankruptcy. Find a qualified business bankruptcy lawyer now.
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