Buffalo Business Debt Relief and Debt Settlement Lawyers[yoast-breadcrumb]
Buffalo Business Debt Relief and Debt Settlement Lawyers
If you own a business in Buffalo and are struggling with debt, you’re not alone. Many businesses have gotten into debt over the past few years, whether from the impacts of the pandemic, supply chain issues, inflation, or other factors. But the good news is, there are options available to find relief. As a business debt relief and debt settlement law firm here in Buffalo, we want to provide an overview of some of the main debt relief strategies businesses can consider, as well as give guidance on finding the right legal help.First off, it’s important to understand the different between debt relief and debt settlement. Debt relief refers to strategies that reduce or restructure your current debt load, such as debt consolidation or Chapter 11 bankruptcy. The goal is to make your debt more manageable. Debt settlement, on the other hand, aims to negotiate with creditors to pay less than the full amount owed, often through lump-sum settlements. This can reduce debt, but also comes with drawbacks like credit damage.
One popular option for Buffalo business debt relief is debt consolidation. This involves taking out a new loan to pay off multiple existing debts, ideally at a lower interest rate. This can make payments more affordable by reducing interest costs and having just one payment instead of many.There are a few main ways businesses consolidate debt:
- Taking out a traditional bank loan or line of credit
- Using an SBA loan – The Small Business Administration offers various loan programs that can be used for consolidation
- Business cash advance – These act like loans but are based on a percentage of future credit card sales
- 401(k) business financing loans – Allow you to borrow against existing 401(k) funds
The key is finding the right loan or lender for your specific situation. For example, SBA loans have attractive low fixed rates but can be tougher to qualify for. Business cash advances provide fast funding but have higher costs. Look at all options to find the best fit.Debt consolidation doesn’t make debt disappear – you still owe the full amount, just to one lender instead of many. But it can provide immediate financial relief through lower monthly payments. Just be sure to avoid racking up more high-interest debt afterwards.
Chapter 11 Bankruptcy
If your Buffalo business has excessive debt and few options left, Chapter 11 bankruptcy may be a debt relief solution. This allows reorganization of debts under court protection.The benefits of Chapter 11 for businesses include:
- Automatic stay – This immediately stops collections, foreclosures, and repossessions against the business after filing.
- Debt restructure – The court can approve a reorganization plan to repay all or part of debts under new terms. This can significantly lower monthly payments.
- Creditor negotiation – Chapter 11 allows negotiation with creditors to reduce amounts owed. Debts can be discharged completely in some cases.
- Business continuation – The business can continue operating throughout the bankruptcy, unlike Chapter 7 liquidation.
The drawbacks are the high legal fees involved, complex process, and damage to the business’ credit and reputation. Chapter 11 also requires full financial disclosures.If considering this option, it’s essential to work with an experienced Buffalo business bankruptcy lawyer. They can advise if Chapter 11 is the right fit and handle the court filings and proceedings. The outcome depends on successfully negotiating a confirmable reorganization plan.
Debt settlement is where a business works with a debt settlement company to negotiate lump-sum payoffs with creditors for less than the full balance. This can potentially resolve debts while paying far less.Here’s a quick rundown of how debt settlement works:
- The business stops paying creditors and instead makes monthly payments to a dedicated settlement account.
- After several months when enough funds accumulate, the settlement firm contacts creditors to negotiate discounted payoff offers.
- If a satisfactory deal is reached, the business pays the settlement amount from the account to resolve that debt.
- This process is repeated to tackle each debt until all have ideally been reduced and settled.
The pros of debt settlement are the ability to resolve debts for pennies on the dollar if successful. The cons are damaging credit, continued collections efforts, high fees (often 20-25% of enrolled debt), and potential tax liabilities on forgiven debt.Debt settlement works best for unsecured debts like credit cards, medical bills, and personal loans. It’s not a good fit for secured debts like mortgages or auto loans. Businesses should consider all their options before pursuing settlement.
Finding the Right Buffalo Business Debt Relief Lawyer
If your Buffalo business is struggling with overwhelming debt, partnering with an experienced debt relief lawyer can make a big difference. Look for an attorney that:
- Has extensive knowledge of business debt relief strategies and laws
- Can provide skilled guidance on the best options for your situation
- Has a strong track record successfully assisting other local businesses
- Is responsive and makes you feel comfortable and supported
- Offers fair and affordable rates for their services
The attorney you choose becomes an invaluable ally in developing the optimal debt relief solution and executing it properly. This can relieve financial stress and get your business back on stable ground.Be sure to research Buffalo business debt relief lawyers thoroughly and meet with a few before deciding. Finding the right legal partner sets the stage for the best outcome.
New York Debt Collection Laws
It’s also important for Buffalo businesses to understand their rights and protections under New York debt collection laws. The state has strong statutes prohibiting deceptive and abusive collection practices.For instance, the New York City Department of Consumer Affairs notes collectors cannot:
- Threaten legal action they don’t intend to take
- Harass you continuously or at inconvenient hours
- Contact you at work if asked to stop
- Discuss your debt publicly or with unauthorized third parties
- Use obscene language or make false statements
The Fair Debt Collection Practices Act (FDCPA) also governs third-party collectors. Violations can lead to civil liability.If facing aggressive collections, document all interactions. Seek legal counsel if you believe improper tactics are being used. The New York Attorney General’s office actively prosecutes illegal debt collection schemes.You can even fight questionable debts with help from Buffalo consumer protection attorneys. One example is the University at Buffalo’s Civil Rights and Transparency Clinic, which assists clients disputing harmful medical and credit card debts.Don’t tolerate intimidation or deception from collectors. Know your rights and fight back.
Options If Facing Business Tax Debt
If your Buffalo business owes substantial amounts to the IRS or New York State, special care is required. Tax debts have more serious consequences like asset seizures and bank levies.Some options for dealing with tax debt include:
- Payment plans – The IRS and state offer installment agreements to pay over 6-72 months. Requires sticking to the plan.
- Offer in compromise – Settles tax debts for less than owed, but requires proving inability to fully pay.
- Currently not collectible – Puts collections on hold if you have minimal income/assets. But debt continues accruing penalties and interest.
- Bankruptcy – Chapter 11 can discharge tax debt in some circumstances, but requirements are strict.
- Innocent spouse relief – May relieve spouses of joint tax liability if certain criteria are met.
The right approach depends on the specifics of each case. Given the complexities, consulting a Buffalo tax debt attorney is highly recommended. They can thoroughly assess the situation and provide expert guidance.
Don’t Delay – Seek Help Today
The bottom line is Buffalo business owners facing serious debt issues should not wait to take action. While the problem may seem overwhelming, there are always solutions available. Partnering with an experienced Buffalo debt relief lawyer can make navigating the process much smoother.Our firm cares deeply about the well-being of local small businesses. We’re ready to help assess your situation, explain all options, and fight to get your finances back on track. Don’t struggle alone – contact us today to schedule a free consultation. With commitment and the right help, you can resolve debt and work towards a more prosperous future.