12 Mistakes to Avoid_How to Negotiate Business Debts

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12 Mistakes to AvoidHow to Negotiate Business
Debts

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12 Mistakes to Avoid How to Negotiate Business
Debts

• When business owners are faced with a
  financial crunch many have no clue how to
  negotiate business debts when creditors start
  calling and demanding payment.
• These 12 simple steps will help business owners
  negotiate with their creditors effectively and
  minimize disruptions to their business
  operations.

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12 Mistakes to Avoid How to Negotiate Business
Debts

• Business Debt Mistake 1 Alienating Your
  Creditors
• When a creditor calls you on the phone, one of
  the worst things you can do is avoid their calls.
  Its a normal reaction because you do not want to
  tell them that you do not have the funds to pay
  them. However, what's worse than telling them you
  cannot pay is leaving them in the dark by
  ignoring their calls and letters.
• Creditors understand that clients will fall
  behind in their payments in the course of doing
  business. If you do not have the funds, it is
  best to tell this upfront. By doing this, it can
  open up opportunities to create other ways to
  paying back the debt such a setting up a payment
  plan or negotiating a lower debt settlement.
• One thing to remember though, never make promises
  that you know you cannot keep. Do not accept a
  payment plan that you know you will not be able
  to sustain. If there is no solution that can be
  agreed to it is best to leave it at that and come
  back another time to resolve the matter.

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12 Mistakes to Avoid How to Negotiate Business
Debts

• Business Debt Mistake 2 Thinking You Can Save
  Your Credit Score
• Unfortunately, when your business is struggling
  financially and behind on its debts and when some
  of these debts are tied to your personal credit,
  trying to save you credit score is usually wasted
  effort.
• Your number one goal should always be to save
  your business to fix whatever problems your
  business has, not to save your credit.
• One of the tricks creditors do is try to entice
  you to pay and in return will not report you to
  the credit bureaus in an effort to save your
  credit score. It may be tempting but could be
  very detrimental to your business especially if
  that cash is badly needed to keep your business
  operating.

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12 Mistakes to Avoid How to Negotiate
Business Debts

• Business Debt Mistake 3 Not Knowing the Full
  Extent of Your Exposure
• Ask yourself these questions
• 1. Are you or anyone involved in the business
  personally liable?
• 2. Are the debts secured by any assets and can it
  be repossessed?
• 3. Can your business operate without certain
  creditors? Which creditors are vital to the
  survival of your business?
• 4. Can you afford to defend a lawsuit?
• 5. Can they freeze your bank account?
• 6. Can they put you in bankruptcy?
• Knowing the answers to these questions will help
  you to determine exactly where you stand when
  you're negotiating your debts with your
  creditors. It will also help you prioritize which
  creditors are the most important, in terms of
  requiring your utmost attention.

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12 Mistakes to Avoid How to Negotiate Business
Debts

• Business Debt Mistake 4 Not Putting Together a
  Debt Explanation File
• This debt explanation file is for your creditors
  benefit. This file will contain the following
• Hardship letter This letter is to explain to
  your creditors the reasons why you are unable to
  make payments.
• Company Financial Statement
• When requested, you send this file to your
  creditors. At times, when your creditors are made
  aware of whats going on with your business they
  are more likely to work with you rather than
  harass you.

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12 Mistakes to Avoid How to Negotiate Business
Debts

• Business Debt Mistake 5 Overestimating Your
  Debt Negotiation Skills Knowledge
• Many business owners think that they are up to
  the task when it comes time to negotiate their
  debts with creditors. And creditors hope that
  this will be the case.
• Creditors always employ the use of professionals
  such as attorneys and debt collection agencies.
  These are people trained in negotiation tactics
  and they count on business owners believing they
  can handle it themselves.
• You need to be honest with yourself to know if
  you truly can handle negotiating with these
  professionals or not. If you cannot, then you
  need to consider having professionals to
  represent you in the matter.

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12 Mistakes to Avoid How to Negotiate
Business Debts

• Business Debt Mistake 6 Not Being Physically
  Emotionally Ready to Negotiate
• When your creditor begins a full collection
  assault against you, expect relentless collection
  calls from the creditor or their agents.
• You see unlike with personal debts where
  collection agents have to abide by the FDCPA
  (Fair Debt Collection Practices Act) rules, with
  commercial debt none exists. This means they can
  call anytime they want day and night and can be
  as harassing as they want to be.
• Here is an excerpt about why the FDCPA does not
  cover business debts
• "Congress believed and continues to believe that
  those who owe business or commercial debts are
  sophisticated enough to withstand or at least not
  be as threatened when faced with business debt
  collection abuse or harassment. Thus, the FDCPA
  does not protect a person who is alleged to owe a
  business or commercial debt. A business who
  believes it is being abused or harassed in the
  collection of business debt should consult
  creditors rights or debtors rights corporate
  attorney."
• If you're not able to handle the barrage of calls
  from them, physically or mentally its best not
  to take them on. You're not alienating them if
  you've already spoken to them at least a few
  times a week and there is no change in your
  business finances, then their continuous calls is
  merely to harass you into paying.

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12 Mistakes to Avoid How to Negotiate Business
Debts

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