In this video, Minnesota attorney Aaron Hall speaks about some of the options available to Minnesota businesses struggling with large amount of debt.
Business Debt Relief Transcript
As a business attorney, one of my favorite types of work is helping business owners who are struggling under a massive amount of debt. I’ll tell you why – because there are some great options available which we’ll discuss when we come back.
I’m Aaron Hall, a business attorney in Minneapolis.
When a business is overwhelmed by debt, there are a couple of ways that we could deal with that. First, going after money that may be owed to them. Getting their money in so that they can in turn cover some of their debts.
The second is working out those debts. Now there are few ways to deal with debts that a business owner may have. One is simply not paying it for a while and ignoring them, but normally it takes a little more finesse and negotiation. Sometimes, it actually comes to litigation and we’ll defend it. But most often they do what’s called a work-out and that’s when we explain to the other side,
“Look, this business owner is in a really tight spot. But if you give him a little time, he’ll be able to deal fairly with you. Now if you want to push this and drive it into ligation, we’ll bring defenses and you can spend a lot of money in a lawsuit. But that doesn’t make a lot of sense when we can work out some more reasonable option so your client can get paid sooner and we can work out some of the differences that may exist that may have caused your client not to get paid in the beginning.”
Typically, the two attorneys can negotiate this and work something out. Sometimes we even have situations where we just negotiate a lumpsum payoff because the creditor says. “I need the money now” and my client says, “we can’t pay now.” One recent example was a loan over $60,000 that a couple business owners owed. We negotiated that down to less than $10,000.
Now that all depends on the circumstances, and typically it’s going to be about a third if you work out some sort of payment. In other words, if the original debt is $100,000, you can often negotiate the immediate payment of a third or $33,000 and then the debt is entirely eliminated. But if you’re going to do something like this, two things: make sure you negotiate with an attorney, and second, make sure you have the full legal release so the creditor can’t come back after you later for the remaining of the amount owed.
If you’re dealing with serious debt, feel free to give us a call. We can talk through your options.