Settling Debts Through Commercial Litigation

June 20, 2022
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Being a business owner can be an all-consuming experience, keeping you busy with everything from planning to marketing and customer service to general business operations. In many cases, businesses do not make it past the first five years, and the Small Business Administration claims that 50 percent of all small businesses fail during this time. You may have had to take out debt, including merchant cash advances, credit cards, and unsecured loans, to help keep the doors open. If you have borrowed more than you can repay, creditors may start coming after you to collect the money. If this happens, you may consider a business debt settlement to help you recover, they have experience settling debts.

The Chicago business lawyers at Grzymala Law Offices can help answer any questions you have about commercial litigation and how you can settle your business debts.

Settling Debts Through Commercial Litigation

When businesses fall behind on their debt payments, they put themselves and the company at risk of turning over to a collection agency. Having your debt go to collections can create issues, especially if the company goes out of business. If you find yourself in this situation, there are some things you can do. A Chicago business attorney can help you with debt settlement and help settle the debts you owe.

What is Business Debt Settlement?

Like consumer debt collection, commercial debt collection can include selling your debt to a debt collection company. These companies purchase debts for pennies on the dollar and work to collect the total amount. These companies also add additional collection fees and interest to the initial loan amount.

In an attempt to collect the debt, you may start receiving calls and collection notices in the mail. In some cases, debt collection closely becomes harassment. If the debt has been in collection for a significant amount of time, a lawsuit may be filed against you.

Business debt settlement is a process where you can negotiate with your debt collectors to pay less than what is owed. Business lawyers Chicago can help negotiate your debt, and if the collection agency agrees to settle, you only pay a fraction of the debt, and the rest is forgiven.

How Does Debt Settlement Work?

When asking a collection agency to settle a debt, you provide them with a specific amount you can afford to pay. The collection agency will forgive the rest of the debt and mark it as settled in exchange. Business debt settlement is a lengthy process, and it is best to hire a Chicago business lawyer to help.

How an Attorney Can Help

Your business lawyer Chicago can help notify the collection agency that you want to pursue a settlement. Additionally, the attorney will request the agency no longer contact you and only communicate through the attorney. If you have money available to use for the settlement, the attorney will start the process immediately. If you do not have the funds, you will pay into an account with the law firm you hired until there is enough money for them to negotiate on your behalf.

Why Do I Need to Settle My Business Debt?

Settling business debt can have many benefits, especially if your business is at risk of closing. Paying the debts could make it possible to stay in business. However, settling business debt can protect your assets if you are going out of business. An attorney knowledgeable about Chicago business law can help show you why settling your business debt is in your best interest.

If your business is struggling with settling commercial debts, call a Chicago business lawyer for help understanding how to settle the debt. The attorneys at Grzymala Law Offices are dedicated to helping our clients resolve their business debt and continue running their businesses. Contact our offices today to schedule a consultation and learn how we can help settle your business debt.