# Business Debt Relief Through Debt Settlement
When business owners fail to meet debt obligations, they face high debts. Business debt relief is essential during financial stress and can help the business survive once more. Before announcing business bankruptcy, it is important to consider other debt settlement means for your business’s success. The process of eliminating debt for the business occurs in various ways. It could be filing for bankruptcy, business loan consolidation, and business debt settlement. These are among the common ways that relieve the business from debts. Read on for a straightforward course of debt settlement by setting out a settlement plan.
## Understanding Debt Settlement
[Debt settlement](https://www.ftc.gov/legal-library/browse/consumer-finance/debt-relief-credit-counseling) entails negotiating with creditors to reduce the debt amount for some huge cash. The successful settlement is facilitated by creditors agreeing to forgive a percentage of the balance incurred. In most instances, people hire companies to carry out the negotiation process instead of dealing directly with the creditors. It is often a more efficient way to deal with debt faster instead of making minimum payouts. However, it is essential for all debt plans to weigh out the disadvantages and advantages involved.
## How Businesses Get Debt Relief
Debt settlement may not be easy as the creditors may disagree with the settlement terms. For your business to qualify for business relief with a company, the business must typically fill in an online form. The companies have to agree on the guidelines and process incurred in the debt settlement. Some guidelines followed in engaging in the debt program entail:
1. Building the account through some insured savings with the debt collecting company.
2. The debt collecting company then negotiates with the creditors to settle the debt on your behalf.
3. Once they reach an agreement, the collecting company calls the company for the debt settlement and approval.
4. On full settlement, you are now free to run the company with adequate freedom.
## How Business Owners Qualify for Debt Settlement
For the debt to be secured, the companies must offer a mortgage, a company car loan for the business to be safe. You must seek a debt evaluation first before engaging in any debt settlement processes. It helps one to know if they are eligible to enroll with the debt collecting company. Eligible debts include personal credit cards used for business expenses.
Qualifications often include:
– You should have more than $7,500 [unsecured debt](https://www.investopedia.com/terms/u/unsecureddebt.asp) in your credit cards, personal loans, and other debts that are not tied to collateral.
– For your business to be under the debt settlement company, the business should be under your name, and you are the [sole proprietor](https://www.irs.gov/businesses/small-businesses-self-employed/sole-proprietorships) of the business.
– You should seek the debt settlement only because you are involved in risks and want your business to rise again.
– You are struggling to make payments for your debts, and you have fallen behind the payments for the specified period.
## Dealing with Small Business Loans
People often choose debt settlement when they are faced with business debt and are at a point of heading to bankruptcy. The debt settlement process can be an efficient way of settling the debt without facing bankruptcy consequences. For small businesses, negotiations are often efficient and lead to a mutual understanding. Settlement acts as a massive relief from overpowering creditors and speeds up your debts’ repayment process. You would ideally be taking two to three years in settling the debts, but with a fair settlement plan, less time in paying out the massive debt, and the business gets back to regular operation.
## Caution and Considerations
While there are many companies looking out for your business’s best interests, it is essential to be cautious not to fall for fraudsters. It is advisable not to pay the suggested amount before the full debt is settled. The debt settlement company should let you know more about the risks involved with the particular risks and how to overcome them.
## Conclusion
Business owners struggle to seek business debt relief due to their financial constraints yearly. The relief overcomes the challenges and helps the business to survive. Before exploring your business to be bankrupt, it is essential to seek credit card debt and certain kinds of business-related debts without filing for [bankruptcy](https://www.uscourts.gov/services-forms/bankruptcy). Debt settlement is vital since it helps one save money and get out of debt within twenty-four to forty-eight months.
Reference:
Schwenk, A. T. (2010). Debt settlement: a beast of burden without any reins. Brook. L. Rev., 76, 1165.
