Many businesses prematurely go into bankruptcy because of the lack of knowledge that their owners have of debt collection and asset protection options that are available to them. Many of these prematurely bankrupted businesses could have been saved through a rather simple implementation of any one of a number of intermediate financial solutions.
Many of these businesses could have been saved through proper partnerships with legal representation that had knowledge of these procedures. Although it is always preferable to have a reputable lawyer on your side, there are some basics of intermediate financial procedures that every business owner should know.
Below are some of the programs that may save your business from bankruptcy if you are in a dire financial situation:
Business debt management programs
Debt management, far from being an umbrella term, is a very specific procedure that is designed to reorganize your business finances to pay down debt in a more organized way. A professional debt management program will help you to cut unnecessary fat from your short-term and long-term budgets. It will also redirect all expendable income to the paydown of debts in a way that will save you interest payments over the long term.
Usually, debt management programs do not involve direct contact with the creditors although it can in particularly dire situations. There are many legal rights that you have as a borrower that actually make debt management preferable to bankruptcy in many cases.
Debt consolidation programs
Debt consolidation is a slightly more intrusive form of financial help. However, it can turn the financial situation of business around without going through a bankruptcy procedure and the long-term credit ramifications of such an action. Debt consolidation does involve direct contact with creditors.
In debt consolidation, your professional third-party representative will attempt to consolidate and sell your debt to an outside creditor at discount. The reason that this form of debt reorganization works is that your current creditors are glad to be rid of the risk and responsibility involved with the collection of debt. Your new creditors will be happy to profit from the interest payments (which should be less than the interest payments you would be paying) while offering you better terms to make sure that your monthly payments are within your monthly budget.
There are many other forms of financial assistance available to you if you are willing to invest in the proper partnerships. Bankruptcy is far from the most viable option in most cases and should only be considered as a last resort.