Minneapolis Business Debt Relief and Debt Settlement Lawyers[yoast-breadcrumb]
Operating a small business in Minneapolis can be extremely rewarding, but it also comes with its fair share of challenges. Many business owners have found themselves struggling with overwhelming business debt and aggressive debt collectors in recent years. If your Minneapolis business is facing serious cash flow problems or falling behind on payments, you may need help from an experienced debt relief or debt settlement lawyer.This article will provide an overview of debt relief and debt settlement options for small businesses in Minneapolis, as well as tips on finding the right lawyer for your situation. We’ll also discuss key laws that protect you from harassment by creditors and debt collectors.
Understanding Business Debt Relief vs. Debt Settlement
Business debt relief and debt settlement are two different strategies for managing unaffordable business debt:
- Debt relief involves working with a credit counseling agency to set up a debt management plan (DMP). The agency negotiates with your creditors to reduce interest rates and create a consolidated payment plan. Debt relief helps you repay debts in full over time.
- Debt settlement involves negotiating directly with creditors or through a lawyer to settle debts for a lump sum that is less than what you owe. Settlements result in reduced balances but can negatively impact credit.
For businesses with severe cash flow issues or debts they’ll never be able to repay in full, debt settlement is usually the better option. An experienced lawyer can often negotiate settlements that save a business 50% or more on what they owe.
Key Benefits of Hiring a Business Debt Relief Lawyer
Trying to negotiate debt settlements on your own as a business owner can be extremely difficult and time consuming. Working with a knowledgeable debt relief lawyer provides important benefits:
- Expert negotiation – Lawyers have the experience and leverage to negotiate the best possible settlements with creditors. They know what terms to argue for.
- Stop creditor harassment – Once informed you have legal representation, creditors and collectors usually halt calls and letters demanding payment.
- Advice on bankruptcy – If settling debts outside of court won’t work, a lawyer can advise you on whether filing Chapter 7 or Chapter 11 bankruptcy makes sense.
- Protect your rights – Lawyers ensure creditors follow laws like the Fair Debt Collection Practices Act. You have rights against abusive collection tactics.
- Focus on your business – You can get back to concentrating on operating your business while the lawyer handles settlements.
Finding the Right Debt Relief Lawyer for Your Business
There are many lawyers in Minneapolis who handle business debt relief and debt settlement cases. How do you find the best one for your specific situation? Here are important tips:
- Look for debt settlement expertise – Search for lawyers who specifically mention debt settlement or negotiation as a service they provide. Avoid those who only list bankruptcy.
- Ask about business experience – Make sure the lawyer has assisted other Minneapolis small businesses with debt issues. Check client testimonials.
- Inquire about fees – Debt settlement lawyers typically charge a percentage of debt reduced, not hourly fees. Get fee estimates in writing.
- Meet for a free consultation – Any lawyer you’re considering should provide a free in-person or phone consultation to evaluate your case.
- Check their reputation – Research lawyers on sites like Avvo and look for disciplinary issues or malpractice lawsuits. Go with someone respected.
- Consider a smaller firm – Opt for a lawyer at a smaller practice who can provide more personalized attention to your business.
Key Laws Protecting Minneapolis Businesses from Debt Collectors
If creditors and collectors are pursuing your business aggressively for unpaid debts, it’s important to know your rights. Key laws provide protections for business owners:
- Fair Debt Collection Practices Act (FDCPA) – This federal law limits collection calls to between 8am-9pm, prohibits threats/harassment, and covers other abuses.
- Telephone Consumer Protection Act (TCPA) – The TCPA provides damages of $500-$1500 per call for robo-calls to cell phones without consent.
- Minnesota Collection Agency Act – Minnesota law requires licensing of collection agencies and upholds your right to dispute debts.
- Statute of limitations – Debt collectors can’t sue to collect in Minnesota past the statute of limitations – three to six years depending on debt type.
Having a lawyer ensures collectors adhere to these laws. Don’t endure illegal practices like frequent late night calls or calls to your customers about your debts.
Options for Settling Business Credit Card Debt
For many Minneapolis small businesses, high interest rates and large balances on credit cards are a major source of debt strain. Settling credit card debt typically delivers the fastest relief:
- Hardship programs – Issuers like American Express and Chase offer internal hardship programs to cardholders struggling to pay. You need to proactively reach out to request help.
- Lump-sum settlements – Creditors will often settle for 35-50% of the balance if you can come up with a lump sum payment to close the account.
- Payment plans – If you can’t swing a lump sum, ask for a payment plan at a reduced interest rate. Get terms in writing.
- Debt management plans – Enrolling credit card debt in a DMP through a credit counseling agency can lower rates and eliminate fees.
Don’t let creditors push you into a high-interest debt consolidation loan. And stop paying cards you’re settling – creditors won’t negotiate if you pay regularly. Get professional advice on the best approach.
Is Bankruptcy a Viable Option?
If your Minneapolis business is no longer viable or you owe debts you have no hope of ever paying off, filing Chapter 7 or Chapter 11 bankruptcy may make sense:
- Chapter 7 liquidation – Stops collection activity and discharges eligible business debts. You must close up shop.
- Chapter 11 reorganization – Allows you to restructure debts and continue operating. Complex and expensive.
A business bankruptcy lawyer can advise if bankruptcy is your most prudent choice after reviewing your specific situation, assets, income, and debts. The impact on your credit score will be severe.
Protect Your Business and Rights
Don’t wait until creditors have secured judgments or liens against your Minneapolis business to seek help. The sooner you consult an experienced debt relief or debt settlement lawyer, the more options you’ll have. You worked hard to build your business – protect it and your rights by taking action now.With the right legal guidance, you can negotiate settlements that resolve unpayable debts and allow you to get back on stable financial footing. Look for an attorney who makes you feel comfortable and seems genuinely invested in your business success. They will handle communications and negotiations with creditors professionally while you focus on operations.There are always solutions for getting crippling business debt under control. The lawyers at Delancey Street have assisted many Minneapolis small business owners in difficult situations. We offer free consultations and reasonable fees. Contact us today to discuss your situation – our team is ready to help you move forward.