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Texas Business Debt Relief Lawyers – A Helpful Guide

Running a business can be extremely rewarding, but it also comes with a lot of financial risk. When cash flow problems hit, many Texas business owners find themselves falling behind on loan payments, credit cards, and other debts. If your business is struggling with more debt than it can handle, you may feel overwhelmed and not know where to turn.

That’s where working with an experienced Texas business debt relief lawyer can help. The attorneys at law firms across Texas help business owners every day negotiate settlements, restructure loans, defend against lawsuits, and explore options like Chapter 11 bankruptcy to eliminate debt. With the right legal guidance, you can take control of your business debt and get your company back on track.

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Common Texas Business Debts That Get Out of Control

There are many types of debt that can put Texas businesses in a financial bind. Some of the most common include:

  • Bank loans – Term loans, lines of credit, SBA loans
  • Business credit cards – Rewards cards, store cards, gas cards
  • Merchant cash advances – Short-term financing with high rates
  • Equipment financing – Loans for vehicles, machinery, technology
  • Commercial mortgages – Loans to purchase business real estate
  • Accounts payable – Outstanding invoices to vendors
  • Unpaid payroll taxes
  • Unpaid sales taxes

When any of these debts become delinquent, lenders and creditors have the right to take collection action. They may call incessantly, assess late fees and penalties, raise interest rates, or sue your business in Texas civil court. It’s critical to work with a business debt relief lawyer before things spiral out of control.

Negotiating Debt Settlements

One of the most effective ways a Texas business debt relief attorney can help is by negotiating debt settlements on your behalf. This involves working directly with your creditors to settle accounts for less than the full balance. Many lenders are surprisingly willing to settle for a portion of what’s owed if they believe it’s the only way to recover anything.

An experienced lawyer will thoroughly review your debts, then reach out to creditors and make a compelling case for a discounted settlement. This can relieve a massive burden from your business and allow you to move forward. Debt settlements may even improve your credit standing over the long run compared to default or bankruptcy.

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What Debts Can Be Negotiated?

Most business debts can potentially be negotiated, including:

  • Past-due vendor invoices
  • Commercial credit cards
  • Business term loans
  • SBA loans
  • Commercial mortgages and leases
  • Medical debts
  • Unpaid taxes

Settlements typically range from 25% to 80% off the total owed. The results depend on factors like how far behind you are, whether interest is accruing, and if legal action has commenced. In general, the sooner you ask for relief, the better the settlement options.

Restructuring and Modifying Business Loans

If your business has fallen behind on loan payments, an alternative to settling them is restructuring or modifying the terms. This involves negotiating with lenders to change the original repayment terms in a way that works for both parties.

Possible changes your Texas business debt relief lawyer could negotiate include:

  • Lower interest rates to reduce monthly payments
  • Extended repayment timeline so loans aren’t due as quickly
  • Interest-only payments for a period until cash flow improves
  • Lower principal balance so the loans are more manageable

Banks and lenders want to get repaid, so if you have a reasonable request they are often willing to modify loan terms rather than force a default. This can provide temporary relief and allow you to get caught up.

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Defending Against Lawsuits

If negotiations fail and creditors sue your business to collect, a skilled Texas debt relief lawyer can defend the case in court. Possible defenses include:

  • The debt is invalid or unenforceable
  • The creditor violated debt collection laws
  • You were not properly notified of the lawsuit
  • The creditor lacks proof you owe the amount claimed
  • The statute of limitations has expired

An attorney knows how to examine the lawsuit for flaws in the creditor’s case and hold them to strict legal standards. Even if some of the debt is legitimate, the amount owed may be reduced. Defending against the lawsuit also buys you critical time to improve your financial situation.

Declaring Bankruptcy as a Last Resort

If debts are completely unmanageable, filing Chapter 7 or Chapter 11 bankruptcy may be the most viable option. This is a complex legal proceeding best handled by an attorney.

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Chapter 7 bankruptcy liquidates your business assets to pay creditors. Any remaining debts are discharged. Chapter 11 allows you to restructure and modify debt under court supervision while continuing operations. Both provide an opportunity to eliminate debt and start fresh.

Bankruptcy can negatively impact your business credit rating for years. An attorney will advise if negotiating settlements or restructuring loans outside of court may be preferable. But in some cases, bankruptcy is the most effective path forward.

Finding the Right Texas Business Debt Relief Attorney

If your Texas business is overwhelmed with debt, don’t wait – speak with a qualified business debt relief lawyer right away. Look for an attorney with extensive experience negotiating settlements, modifying loans, defending lawsuits, and exploring bankruptcy if needed. Key credentials to seek out include:

  • 10+ years handling complex business debt cases
  • Knowledge of Texas debt collection and creditor laws
  • History of successful debt negotiations and settlements
  • Litigation experience defending businesses in debt lawsuits
  • Familiarity with Chapter 11 and Chapter 7 bankruptcy

Also consider reviews from past clients and associations with professional legal organizations. Debt relief laws and options can be complex, so you need an attorney well-versed in all the nuances that apply to Texas businesses.

Do not wait until creditors have filed lawsuits or taken other legal action against your business. The sooner you enlist help from an attorney, the better your chances of negotiating settlements and avoiding drawn-out litigation. Most offer free initial consultations, so you have nothing to lose.

Common Legal Strategies Texas Business Debt Relief Lawyers Use

Experienced Texas business debt relief attorneys have many legal strategies at their disposal to help clients resolve overwhelming debt. Here are some of the most common and effective approaches:

Negotiating Favorable Repayment Terms

In many cases, an attorney can negotiate modified repayment terms on delinquent debts that are realistic for the business to manage. This may involve lower payments, waived fees, reduced interest rates, extended timelines, or interest-only payments until cash flow improves.

Settling Debt for Less Than Owed

Creditors often agree to settle debts for a fraction of the balance when presented with a compelling legal and financial argument. Skilled attorneys may negotiate settlements of 25% to 80% off the total owed.

Correcting Information on Credit Reports

An attorney can force creditors to correct any inaccurate, unverified, or obsolete information on your business credit reports. This can improve scores and terms for future financing.

Asserting Statute of Limitations

If the statute of limitations has expired on old business debts, an attorney can ensure they are no longer legally enforceable. Time limits range from 2 to 6 years in Texas depending on debt type.

Filing Chapter 11 or Chapter 7 Bankruptcy

For businesses with no viable path forward under the debt load, bankruptcy may provide needed relief. Chapter 7 liquidates assets to pay creditors while Chapter 11 allows restructuring of debts.

Defending Against Lawsuits

When creditors sue, lawyers defend against the case by requiring strict proof it is valid, contesting the amount owed, and asserting any collector violations.

Challenging Garnishments and Levies

Attorneys fight back when creditors attempt to seize funds from bank accounts or garnish wages without following proper procedures.

Forcing Violators to Pay Statutory and Actual Damages

If creditors harass you or violate debt collection laws, they may be liable for statutory damages of $1,000 per violation plus actual losses.

Questions a Texas Business Debt Relief Lawyer Will Ask You

In your initial consultation with a Texas business debt relief attorney, they will ask detailed questions to understand your full situation. Be prepared to answer:

  • What types of business debt are causing problems?
  • When were payments first missed or loans defaulted?
  • What efforts have you made to negotiate with creditors so far?
  • Have any creditors threatened or filed lawsuits yet?
  • Are business assets available creditors could attempt to seize?
  • Could personal assets of owners be at risk if business defaults?
  • What collateral did you pledge for loans that are in default?
  • Are you current on payroll taxes, sales taxes, and other obligations?
  • Do you have past-due vendor invoices or other accounts payable?
  • What are your goals – settle debts? Restructure payments? Bankruptcy?

Providing as much detail as possible allows attorneys to give you accurate advice regarding the best path forward to resolve your business debts.

When to Hire a Texas Business Debt Relief Lawyer

Do not wait until your debt situation spirals out of control before seeking legal help. It is best to contact a Texas business debt relief attorney as soon as you begin struggling with late payments and creditors calling about past-due accounts. Key times to enlist help include:

  • You’ve missed multiple loan or credit card payments
  • Creditors are calling daily about late or missed payments
  • You receive notice creditors have turned accounts over to collection agencies
  • Lawsuits have been threatened if immediate payment isn’t made
  • You get notice you’re being sued by a creditor or lender
  • A creditor gets a judgment against your business
  • Your bank account or assets are frozen or seized
  • You receive notice of impending foreclosure on a commercial property

Waiting until the last minute limits your options. Seek counsel early for the best chance of negotiating favorable settlements.

Advantages of Hiring a Business Debt Relief Lawyer

Texas business owners facing overwhelming debt can benefit from legal counsel in many ways, such as:

  • Expert Negotiation – Attorneys regularly negotiate debt settlements with lenders and often secure very favorable terms.
  • Knowledge of Laws – Lawyers use their in-depth knowledge of debt collection laws to protect client rights during settlement talks.
  • Objective Guidance – They provide impartial guidance on best options for resolving business debt issues.
  • Better Financing Terms – Attorneys can help remove negative information from credit reports to secure better financing.
  • Peace of Mind – Professional legal advice eases stress and uncertainty when dealing with serious debt.

With an attorney as an advocate, creditors also demonstrate more willingness to offer reasonable settlement options. Hiring an attorney puts you in a position of strength.

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