Garland Business Debt Relief and Debt Settlement Lawyers[yoast-breadcrumb]
Garland Business Debt Relief and Debt Settlement Lawyers: An Overview for Texas Companies
Running a business is hard work. You put your blood, sweat, and tears into making your company succeed. But sometimes, despite your best efforts, your business falls on hard times. Maybe sales took a nosedive during the pandemic. Or your costs shot up due to inflation and supply chain issues. Whatever the cause, suddenly your business is drowning in debt.If this sounds familiar, you’re not alone. Thousands of Garland, Texas businesses are facing more debt than they can handle. But take heart – there are solutions available to get your company back on track. Garland business debt relief and debt settlement lawyers can help you negotiate, consolidate, and even eliminate business debts.At Delancey Street Financial Company, we understand the challenges Texas companies face. Our team has decades of experience helping businesses just like yours find financial freedom. In this article, we’ll explain:
- Common causes of business debt
- Pros and cons of debt relief vs debt settlement
- Steps in the debt relief and settlement process
- Key Texas laws and legal precedents
- Defenses business owners can use
- How to choose the right lawyer for your situation
Let’s get started on the road to financial recovery for your Garland business.
Why Do Garland Businesses Struggle with Debt?
There are many reasons a once-successful Garland company might fall behind on its debts, including:
- Economic downturns – The pandemic triggered temporary closures and revenue declines for many businesses. Even as the economy rebounds, some are still struggling with debts accumulated during 2020 and 2021.
- High operating costs – Inflation is driving up costs for raw materials, supplies, utilities, and other operating expenses. For businesses with thin profit margins, these cost hikes can mean falling into the red.
- Supply chain disruptions – Global supply chain problems make it harder for companies to obtain parts, ingredients, and other inputs they need. Production and sales suffer as a result.
- An overly optimistic growth strategy – Some business owners expand too aggressively by taking on lots of debt. But if their rosy sales projections don’t pan out, all that debt becomes unmanageable.
- Disasters – Severe Texas weather events like hailstorms, floods, and winter storms can damage inventory and facilities. Insurance doesn’t always fully cover the losses and disruption to operations.
- Poor financial management – Many entrepreneurs are great at their industry but weaker on the financial side. Poor budgeting, accounting, or cash flow management can lead to debt spiraling out of control.
Whatever the reasons your Garland business is struggling with debt, take heart. You have options to resolve the situation. Debt relief and settlement can help you regain your financial footing.
Debt Relief vs. Debt Settlement for Garland Businesses
If your business owes more than it can realistically pay back, you essentially have two options – debt relief or debt settlement. What’s the difference, and how do you choose?
Debt relief involves working with a credit counseling agency to develop a Debt Management Plan (DMP). The agency negotiates with your creditors to:
- Lower your interest rates
- Waive certain fees
- Offer concessions like letting you skip some payments
- Consolidate multiple debts into one monthly payment
The goal is to make your debt more affordable and manageable. A DMP requires you commit to making regular payments, typically for 3-5 years until the debts are repaid.Pros: You avoid bankruptcy and damage to your business’ credit rating. Lower interest and payments are easier to handle. Creditors often agree to a DMP since they’ll recover more money than if you default completely.Cons: It can take years to repay debts under a DMP. Creditors may not agree to sufficient concessions to make the payments affordable. DMPs have strict eligibility requirements that exclude some businesses.
Debt settlement involves negotiating directly with creditors or through a lawyer to pay a lump sum that is less than what you owe. The creditor agrees to accept the lower payment as payment in full. The remaining debt is forgiven.
Pros: You can resolve debts much faster, often within 2-3 years. Creditors typically forgive 20% to 50% of what you owe. There are fewer eligibility limitations than DMPs.
Cons: You must have available funds to offer as the settlement payment. Defaulting on your debts damages your business’ credit. Creditors may sue you before agreeing to settle.As you can see, each option has pros and cons. The right choice depends on your specific situation. A debt relief lawyer can advise you on which path offers the best financial recovery for your Garland business.
The Debt Relief and Settlement Process Step-By-Step
Here is an overview of what’s involved in the debt relief and debt settlement process:
1. Review Debts and Assets
Catalog all your business debts, creditors, interest rates, and repayment terms. Also list your assets – cash, accounts receivable, equipment, property, etc. This info helps in negotiating settlements.
2. Prioritize Debts
Rank your debts from most to least critical. Settlement lawyers first negotiate with the most urgent creditors, like those threatening legal action.
3. Negotiate with Creditors
Your lawyer contacts creditors to propose settlements. For debt relief, they try to get concessions like reduced interest rates. For debt settlement, they offer lump sum payoffs at a discount.
4. Finalize Agreements
Once terms are negotiated, legal agreements are drawn up defining the new repayment terms or settlement amounts. All parties sign.
5. Make Payments
Under debt relief, you begin making monthly payments per the debt management plan. With debt settlement, you pay the lump sums agreed to.
6. Debt Eliminated
As you make payments over time, debts are paid off under debt relief. With debt settlement, remaining balances are forgiven once you make the final settlement payment.Having an experienced lawyer handle negotiations is crucial. Creditors often initially reject settlements but lawyers know how to negotiate to get acceptable terms.
Key Texas Laws and Legal Precedents
Texas has specific laws and legal precedents that govern business debt relief and settlement options in the state:
- Texas Debt Collection Act – Prohibits harassment, threats, and deception by creditors seeking repayment. It provides consumer protections Texas business owners can leverage in settlement talks.
- Texas Fair Debt Collection Practices Act – Further protects consumers against abuse by collectors. Violations can lead courts to reduce or void debts.
- Discharge of debt rule – Under Texas Tax Code Section 111.016, forgiven debt may be treated as taxable income. Settlement lawyers use strategies to exclude discharged business debts from taxes.
- Credit Access Businesses law – Texas Finance Code Chapter 393 regulates lenders, setting maximum interest rates and fees. This limits what creditors can legally demand from debtors.
- Precedents on creditor obligations – Texas courts have ruled creditors must act in good faith in settlements. Unreasonable refusal to settle can work against creditors in court judgments.
An attorney experienced in Texas debt law will ensure your rights are protected in all negotiations and agreements.
Defenses Garland Business Owners Can Use
If creditors sue your business over unpaid debts, your debt relief lawyer can raise defenses to fight the lawsuits:
- Statute of limitations – In Texas, creditors have only four years to sue for most debts. Older debts may be excluded by the statute of limitations.
- Improper service – If you weren’t properly served the lawsuit notice, the court may dismiss the case.
- Unregistered debt buyer – It’s illegal in Texas for debt buyers to collect without registering locally. Cases can be tossed if the plaintiff didn’t register.
- No validation – Under the FDCPA, collectors must validate debts they seek to collect. No proof means no case.
- Unreasonable fees – Texas law caps fees creditors can charge. Excessive fees can invalidate debts.
- Lack of good faith – As noted earlier, creditors must negotiate settlements in good faith. Refusal to do so weakens their position if they sue.
A skilled lawyer knows how to effectively apply these defenses to protect your interests. Be sure to choose an attorney experienced with Texas debt law.
Choosing the Right Debt Relief Lawyer for Your Garland Business
As a Texas business owner facing unmanageable debts, it’s critical to have an experienced debt relief and settlement lawyer in your corner. When choosing legal counsel, look for these traits:
- Expertise in business debt relief – Search for a lawyer focused specifically on assisting companies with debt problems vs. a general practice attorney.
- Successful track record – Ask about the lawyer’s background negotiating debt settlements with major banks, suppliers, vendors, and other business creditors.
- Texas experience – Opt for an attorney very familiar with Texas debt collection laws and creditor litigation practices in your state.
- Reasonable fees – Fees should be affordable for a struggling business. Avoid lawyers charging large upfront retainers.
- Good reputation – Read online reviews and check with the State Bar of Texas to ensure the lawyer has an ethical reputation.
- Responsive service – Pick a lawyer who is readily available to update you on negotiations and quickly respond if creditors sue.
The debt relief lawyers at Delancey Street Financial Company meet all these criteria. Our Texas business debt experts are here to defend your interests when creditors come calling.
Find Financial Freedom for Your Garland Business
If debt has your once-thriving Garland company on the ropes, take back control of your financial future. With the help of an experienced Texas debt relief and settlement lawyer, you can negotiate deals that lighten your debt burden and let you get back to business.At Delancey Street Financial Company, our business is helping businesses like yours regain their financial footing. Our team knows how to deal with even the most aggressive creditors to reach settlements that work for you. Don’t wait until creditors force your hand through lawsuits and other collection actions. Contact us today for a free consultation, and let’s start crafting your business debt solution.