Business Debt/Business debt

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Expert: - 9/4/2009


Question
Since 1995 my husband & I own a small company. Around 2007 we aquired alot of debt through our vendor who we still currently use. They put us on COD in '08 while paying what we can (average of $200 a mon.) on past debt. Everything seemed fine, now they want more money a month ($500.00 a mon.) which we just cannot afford. If we don't accept that, they will put our account on hold preventing us from getting our supplies that we pay COD. What are our options? We have thought about going to the Director of Credit through the company and trying to negotiate a settlement. If it weren't being the only supplier in our state, I would continue to pay the $200 a month and let them put our account on hold and use someone else for our current supplies, but that is not an option. I sure hope you can give me some insight on this matter. I've spent the last 2 evenings searching the internet for any solution. Thank you!

Answer
Mysti,
If you are paying COD for purchases while you pay down a past due balance, it is very unlikely you can negotiate a settlement on the past due balance.  That might only happen if you were no longer purchasing from this customer.  When they offer a settlement, they lose money, and all of their profit.
Your options are to pay off what you owe so you don't have the past due balance and then continue to pay COD for future orders so that you don't ever have a balance due and therefore would never have a past due balance. If you cannot pay the balance you owe them but still want product from them, being a business person I am sure you understand they must be paid and cannot offer you continued service without being paid. You could try going to your local bank to get a loan for the amount you owe this company, that way you can make payments to the bank that might be more affordable for you and you could continue ordering from this company on a COD basis to avoid getting further into debt.

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Michelle Dunn

Expertise

As one of the Top 5 Women in Collections, one of the Top 50 Collection Professionals, and winner of the Business Excellence award, I can answer any questions about debt, debt collection, improving business credit, creating a credit policy, enforcing a credit policy and collecting on past due accounts. I can also answer questions in regards to starting a debt collection agency since I have been a bill collector for over 24 years, started and ran my own collection agency for 8 years, and maintain my 12 year old Credit & Collections Association for members of the credit & debt collection industry. I am also the author of the popular and award winning book "Starting a Collection Agency, how to make money collecting money" now on it's 3rd edition. This book has won a the Writers Digest self published award as well as the New York Book Festival Award. I am a repeat contributor to the Wall Street Journal, and have been featured on NPR, CNN, as well as many other national radio and television programs. I have also been featured in national publications such as the Wall Street Journal, Forbes, Smart Money, MSNBC and much more. I have 17 published books to my name and am an accomplished speaker and consultant. I currently write 9 columns for newspapers, magazines and online portals worldwide.

Experience

I have over 24 years experience in debt collection, I started and ran my own collection agency for 8 years and I am the founder & owner of my Credit & Collections Association that I founded in 1998. www.credit-and-collections.com

Organizations
My Credit & Collections Association, I was also a member of the American Collectors Association and Plymouth Chamber of Commerce for 11 years. I am a member of many writing groups as well as my local Women Inspiring Women chapter. I am a member of Know More Media as an expert for their blog on business credit.

Publications
Business NH Magazine, Smart Money Magazine, MSNBC, CNN, Forbes.com, The Wall Street Journal, Home Business Magazine, Entrepreneur Magazine and website, many books, newspapers and television programs as well.

Education/Credentials
I have written 17 books in my collecting money series and one for Entrepreneur Press called the Ultimate Credit and Collections Handbook. My newest book is being published by John Wiley & Sons in May titled, The Guide to Getting Paid, how to weed out bad paying customers, collect on past due balances and avoid bad debt. This book is also being sold to many colleges as a text book.

Awards and Honors
My book Starting a Collection Agency, how to make money collecting money won an award from Writers Digest and the 2007 New York Book Festival in the "How to" category. I have won 2 awards from Dun & Bradstreet and Governor Jean Shaheen. I was nominated as one of the Top 5 Women in Collections twice as well as having been selected as one of Collection Advisor's Top 50 Collection Professionals by my peers.

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