10 Questions to Ask Business Debt Settlement Companies

If you run a small business that’s struggling with debt, working with a  business debt settlement company could help you negotiate and reduce what you owe. But not all settlement companies are created equal. Asking the right questions upfront can help you find an ethical, experienced company that truly has your best interests in mind.

1. What types of business debts do you have experience settling?

An established company should have experience successfully settling a wide variety of  common business debts like:

• Business loans and lines of credit
• Merchant cash advances
• Commercial mortgages
• Equipment financing loans
• Business credit cards
• Outstanding invoices and bills

Look for a company that regularly settles business debts similar to yours. Their familiarity with your type of debt can help them better negotiate on your behalf.

2. What is your success rate?

Any reputable settlement company should be happy to provide hard numbers on their success rate. Be wary of any vague claims or guarantees. Ask specifically:

• What percentage of your clients achieve a settlement?
• On average, what percentage reduction from the original debt do you typically negotiate?
• How long does the process take from start to finish?

Make sure the company’s reported success rate seems realistic given the above timeline. Unrealistically fast or high settlements could indicate scammy practices.

3. Do you have business debt settlement attorneys on staff?

Settling complex business debts often requires legal expertise. Ask if the company employs experienced business debt attorneys to advise on settlements and handle negotiations when needed. If not, make sure they at least have partnerships with external business lawyers they can bring in if your case requires it. Having access to legal advice can give you more leverage in getting debts reduced or dismissed.

4. How transparent is your fee structure?

Reputable companies will be very upfront about their full rates and fees. Get clear specifics on:

• Enrollment or account set up fees
• Monthly service fees
• Settlement fees or percentages of savings
• Any other charges that could come up

Make sure you understand exactly what you’ll owe and when before signing anything. Transparency around fees is a good sign.

5. Can I talk to some of your past clients?

Don’t just take a company’s word on their great service. Ask for two to three past business clients you can contact for references. Speaking to others they’ve worked with can give you a better sense of what to expect.When talking to references, ask questions like:

• How much debt did they have settled?
• How satisfied were you with the outcome?
• How responsive was the company throughout the process?
• Would you recommend them to other business owners?

6. Are you upfront about risks or downsides?

Debt settlement always involves some risk or potential impact on your business. A trustworthy company should discuss these openly including:

• Risk of settlement rejection – Be realistic that creditors may reject initial settlement offers or negotiations could fall through.
• Impact on business credit score – Late payments or settled debts can negatively impact your business credit reports.
• Tax implications – Settled debt could be treated as taxable income by the IRS.

If a company brushes past these downsides or claims there is no risk, that’s a red flag.

7. Do you offer creditor negotiation coaching?

The best settlement companies don’t just negotiate on your behalf. They also coach business owners on dealing with creditors directly with templates for calls and letters.Ask specifically what creditor negotiation training they provide. These communication skills can continue helping your business long after settlements are completed.

8. How often will you update me on progress?

The debt settlement process involves a lot of waiting as initial offers are made, rejected, and negotiated. Make sure the company won’t leave you hanging during this period.Ask how often you can expect status updates on settlements in progress. Will you have one main point of contact or speak to multiple people? Clear communication expectations upfront can prevent frustration down the line.

9. What happens if creditors sue while settlements are pending?

If creditors lose patience during lengthy negotiations, they could pursue legal action against your business. Ask ahead of time how the settlement company handles lawsuits and legal complaints that arise mid-process.Ideally, they should have partnerships with business lawyers and resources to defend you from creditor lawsuits while working towards settlements.

10. What sets you apart from other settlement companies?

With an abundance of options out there, why should you trust this particular company over competitors? Let them sell you on their unique value proposition.Listen for things like: years of experience, settlement success rates, expertise settling specialized business debt, complimentary services like creditor negotiation coaching, access to legal advice, or even philanthropic initiatives.

Trust Your Gut

Settling complex debts while continuing to run a business is extremely difficult. The right settlement company won’t just reduce what you owe on paper. They will also provide moral support and give you hope during dark financial times.Ultimately, go with the company your gut tells you has the empathy, integrity and commitment to fight for your business’ best interests. The stakes are high, but the rewards of freedom from burdening debt can be life changing.

Our Company Can Help

Here at Delancey Street, our attorneys and debt experts have helped thousands of small business owners settle millions in debt over decades in business. Our <a href=”https://www.avvo.com/business/business_lawyer.html”>business lawyers</a> can provide legal guidance tailored to your unique situation. And our hands-on approach means having a dedicated case expert overseeing your settlement from start to resolution.To learn more about our custom business debt settlement process, call us today at 212-210-1851. Our experienced team is here to help you regain control over your finances.