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Question
I manage a small business with four full time
employees. I want to buy the business, it is a LLC, but has a lot of debt. Credit cards and a bank line of credit. The debt is around 70k. The owner is ready to go bankrupt. I want to become the owner and my question is can I tell the creditors that I will pay a certain amount each month but that amount will be far less than the regular monthly payment. We pay about $2200 a month on the dept. I would like to close the accounts and pay around $1000 per month. Can we tell the creditors that we will pay x amount each month, take it or leave it? It is a good business worth saving. Thanks for you advice.
Charles
Charles:
Thank you for the question. If you are buying the business, you will not automatically assume the debt, as the prior owner has likely signed a personal guarantee. Whether or not he is still involved with the business, he is responsible for payment. However, if you are assuming payment of the accounts, you should call the creditors with him on the line, and have him authorize you as payer. As well, you need to ask to be put into a hardship payment program as you have described the need for a lower payment. Most companies will offer this, but some not until the account is delinquent. The purpose of these programs is to lower interest and payments for a period of time usually from 9 months to 5 years. At some point you may also elect to negotiate settlements with the creditors to pay the accounts off at a discount. When you do this make sure that no one including your new employees will have charging privileges and that the lines are closed from further activity. This will help prevent "issues" as you are attempting to pay off the balances. Good luck, and if you found this answer helpful, please take a moment to submit a positive rating or comment so others can benefit as well.
Respectfully,
Christine Janklow
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Answers by Expert:
Christine 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. In the area of commercial debt settlement I have over 10 years experience working with large and medium corporations and closely held businesses to enable successful debt reduction and turnaround. I am a professional debt arbitrator and have negotiated with major banking institutions as well as vendors, suppliers and other trade creditors.
Organizations
Provisors;Turnaround Management Association; Los Angeles area
Publications
Accounting Today; Web CPA; National Restauarant Association;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, food service industry and other small businesses and service providers.
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