AboutChristine Janklow Expertise As President of SettleSource,Inc. a business debt settlement firm, I invite you to inquire about all aspects of business debt solutions to best determine which may be most appropriate. If you have questions such as: What is debt settlement and how process provide debt relief to my business? What options are available to deal with my business debts? Is it possible for a business owner to negotiate their own settlements? Why is debt settlement preferable to filing a bankruptcy or debt consolidation? Why are creditors willing to provide settlements to a business? How will settling debts affect credit scores? or How to rebuild a business after debt is eliminated. Please ask it now! For more information regarding how debt settlement can help your business, please visit www.SettleSource.com and place your inquiry. Mention All Experts to have a confidential no cost consultation with Christine. If this is your business situation time may play a very important factor in getting matters resolved proactively before they have negative affects on the business.
Experience My expertise is specific to providing business solutions that will have profound positive impacts on the financial health of businesses. I have 25 years experience as an entrepreneur and have developed national sales programs; strategic alliances; product development; marketing programs; business and turnaround plans and debt settlement programs all providing methods to improve the financial outlook for large and small businesses.
Organizations Turnaround Management Association; Los Angeles area
Publications Los Angeles Daily News; Today Magazine Monthly series of business articles entitled "Brand News."
Education/Credentials Bachelor of Business Administration; Associate of Arts Merchandising
Past/Present Clients American Airlines, American Express, Safeway Inc., New York Life, consumer products manufacturers; retailers and service providers.
Question I had to close my bookkeeping service (sole prop)due to lack of funds. However I still owe close to $10,000 in credit card debt. I am getting farther and farther behind and can't even make the minimum anymore due to high rates and late charges - and it just keeps getting worse. Is there an alternative to going bankrupt and if not would that affect my personal finances? I am hanging on by a thread.
Answer Nancy:
Thank you for your inquiry. I regret that your business did not fare well and was forced to close. To address your concerns about what your options may be, let me first begin by saying that it appears you have done all you can to make good on repaying your obligations. Here is where your choices must begin. Although you like most have invested personal money (and credit worthiness) into your business, you must understand that your creditors more than likely have already been repaid most or all of your original principal. When you signed up for your credit cards, it is unlikely that you agreed to pay upwards of 30% interest is it? The creditors play many tricks to be able to default interest to a higher rate, things like making a payment even an hour late on your payment date, or you being late on another credit obligation. What I am trying to say is that they have changed the terms on you already, making it much harder for you to ever repay all of what you owe. So what can be done? You have about five options, and I will indicate the pros and cons of all.
1. Do nothing - not really an option but some think it actually will make the debt go away.
2. Consolidate or transfer debt, through an equity line of credit, or some other collateral loan. - Not really possible for most in the wake of our sub-prime mortgage crisis. Furthermore, you would be transferring unsecured debt to secured and eroding equity on your home.
3. Credit Counseling, this is a "non-profit" group of companies that claim to be able to negotiate reductions on interest. Most can, but here is the drawback, you will still be repaying 100% plus reduced interest, fees for services (yes even non profits charge fees), you may incur late charges if they "batch" payments after due date, and they flag your credit score as needing assistance. Looks like a bankruptcy on paper. They have a 90% drop out rate because it takes five years to complete and does not really lower monthly payments.
4. Debt Settlement - Companies offering these programs can negotiate reductions on balances owed on credit cards, by withholding payment until the client has set aside recommended funds to settle at a discount. BE warned, a majority of consumer debt settlement companies charge a flat fee % rate and take all their fees up front in the first 12-18 months of the program. This means, that they will probably never get to settling your debts because there is no incentive or money to do so. (I represent a company that settles business debt and our fees are primarily success based. You can see my profile on this website if interested in this option.)
5. Bankruptcy, the last and most costly resort. You may or may not even qualify or be able to afford this option. Most Ch 7 or Ch 13 work is done by competent attorneys for about $3000, upfront even before creditor workouts.
The truth about preserving your credit is unless you are making every payment ontime, everytime and your debt to income is at a low ratio and your cards are not maxed out, than it is likely your credit is already taking a hit. Consider the high costs of keeping good credit. Even if you filed a BK, you could begin rebuild credit after about 3 years. If I were you, I would strongly consider option 4. It works and can save you significant money on a monthly and long term basis. Call me directly if you want to know more about this option. 800-630-9960. I hope this answer proves helpful, if so please take a moment to provide a positive rating and feedback so others may benefit from it as well. Good luck to you.
