Is it time for a Business Debt Check up?
The Kentucky SBDC can help – here are a few tips:
1.) Don’t hide when you fall behind
Getting collection calls can be stressful. But screening your calls for collectors can only make things worse. This can lead to an escalation of efforts on their part.
2.) Know how much you owe
Without accurate numbers, it’s hard to project paying your creditors or agree to any kind of payment plan.
3.) Know your liabilities and exposure
Review all agreements you’ve signed and the terms they contain. Look for any personal guarantees you may have signed. Pay special attention to any debts that have family or friends as co-signers.
4.) Learn about the different stages of collection
All collection efforts are not equal. For example, an out of state collection letter from an attorney could be a simple threat, while an attorney letter from your state could signal an imminent lawsuit.
5.) Prioritize your creditors accordingly
Before negotiations of any kind, you must determine which creditors are truly vital. Vital creditors are any creditors you can’t operate your business without their product or service.
6.) Finally, don’t make promises you can’t keep
It does you no good to promise a payment you can’t afford to make. Once you break a payment plan, your creditability is compromised. This can harm your chances of an affordable resolution.