Part of running a business is incurring debt. You can try and deny it, but it’s inevitable. At some point, you’ll need a cash injection as the resources you have won’t be enough. Unfortunately, being in charge of a startup means dealing with unforeseen bills on a daily basis.
There is nothing wrong with debt as long as you understand how to manage it. If you don’t, you may now be in a situation where the interest payments are killing you. In this case, it’s best to flip the script and stop the debt dead in its tracks.
Here are the tips that can make it happen.
Speak To Creditors
They aren’t going to wipe your debts because they want their money back, but they may erase the interest. Although it sounds like an unrealistic thing to happen, lenders aren’t stupid. They know that you can file for bankruptcy and delete all of your arrears and they won’t see a penny. So, it’s better for them to recoup their original investment and break even than it is to lose money. One way to do that is to cease the interest payments and create a payment plan. However, they’ll only do it if you speak to them and explain your circumstances.
Usually, businesses have more than one debt to deal with, which means multiple repayments. Often, the stress of dealing with various creditors can lead to arrears spiraling out of control. It’s far easier to break it down into one manageable payment so that you can concentrate on one thing at a time. To do this, you’ll need a consolidation company which specializes in the area. A word of warning: make sure the rate is affordable. It won’t be as cheap as dealing with multiple debts, but it shouldn’t be a racket, either.
File For Bankruptcy
Now, it’s worth noting that this is the last resort as it comes with lots of negatives, but there are pros too. Part of bankruptcy law in this country means the right settlement can erase debts completely, wipe away a chunk of them, or put a stay on any action. Chapter 7 is the best option available as it gives you a fresh start. However, you may not be able to eliminate all of your arrears if they are secured, which is where chapter 13 comes into play. Speak to a specialist before committing, yet be aware of the benefits.
Sell, Sell, Sell
You created the company and built it into the empire it is today. Still, you may have to sell depending on your levels of debt. When a new manager takes over the reigns, they are liable for any corporate arrears, unless the obligations are personal. As a result, the offer may be on the low side, yet you have to balance the pros and cons. Is it better to take the money and run or stay and fight a protracted battle?
The decision is yours, so what are you going to do?