Small Business Bankruptcy - Legitimate Alternatives For Start Up Businesses To Eliminate Debt

Small Business Bankruptcy - Legitimate Alternatives For Start Up Businesses To Eliminate Debt

Small business bankruptcy is one of the worst things that the small business units are facing after the recession. The recession has caused severe problems for those people who are involved in home businesses or start-up businesses. The withered financial condition of the economy has led to a situation where these business units fail to repay their creditors. This has happened because of the fact that the consumers suffered from lowered purchasing power. These small and start up businesses suffered a lot because of this and they eventually moved towards bankruptcy.

There are some legitimate alternatives for small business to eliminate debt. These are same as those available for the individual consumers. The two major alternatives available are:

* Debt settlement.

* Debt Consolidation.

In settlement these small and start up businesses need to hire professional debt settlement companies which can deal with small business debt settlement. These professional negotiator from the settlement firm will ask the business owner to stop making payments to the creditors and then when the creditor sells off the debt to a collection agency for recovery, the negotiator will contact the creditor and offer a repayment of 30% to 50% of the total due in bulk against elimination of the remaining amount of the debt. The creditor will be more than happy to get this deal because it will mean a lump-sum amount of money being paid in one time and also it will be a better deal compared to the one offered by the collection agency. The creditor will then eliminate at least 50% of the debt that the small business has and the remaining amount of the money is to be paid to the creditor.

The second alternative for the small businesses is that of debt consolidation. The business owner needs to hire a professional debt consolidation firm. The consolidator from the firm will negotiate with the creditors to reduce the rate of interest and at the same time the creditor is also requested to remove some of the costs of the debt such as late fee, over limit charges, service taxes and other. The consolidator may also ask for extension of the repayment period. The consolidator will threaten the creditor of bankruptcy in case the creditor declines the request. The creditor will then reduce the rate of interest and will re-amortize the payments. The owner of the small business will then make one payment every month to the consolidator who will then distribute the money among the creditors.

These are the two alternatives which are available with the small businesses to eliminate their unsecured debts.

Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement. Check out the following link to locate legitimate debt help in your state.

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