(From Contributor Marvin Power) Business debt settlement firms are now compelled by federal law to inform you about the implications of debt settlement for your business before you hire them for their services. This regulation actually is applicable to all debt settlement firms that try to promote their business via phone. Other debt settlement companies must inform you about the consequences even if it is for disclosure only. You must understand certain important things about business debt settlement before opting for it so that you could make the best decision for your business. Here are some things that you must keep in your mind so that you are not disheartened at the end.
Settlement Certainly Is Not Guaranteed
You must remember that when you apply for your business debt settlement, it is simply a negotiation process. While several debt collectors and creditors would settle your debts for less than the actual amount owed, it is an established fact that not all creditors would be interested in your debt settlement or agree to settle your business debt. Business debt settlement would be easily accepted if you are lagging behind on your payments or your business seems to outside the jurisdiction of the statute of limitations. Do ample research and browse through debt settlement reviews for more details and relevant information.
Settlement Would Be Time-Consuming
If you are very much behind on your payments, you would be having quite a good opportunity to settle your business debts since creditors are not very much interested in settling debts that are not delinquent. When you are faltering in your payments, you would still require substantial cash. Be ready with a lump sum for settling your debts. Till you are able to arrange the lump sum, you would have to keep dodging the calls from both the creditors, as well as, the debt collectors. So, all this would take a considerable amount of time. You must be mentally prepared that debt settlement may happen but would be time-consuming.
Debt Settlement Does Not Automatically Erase Negative History
Your credit report could be adversely impacted by a debt settlement. The debt settlement entry would certainly be there in your credit report for almost 7 years or so. However, after that, there would be no proof that you had opted for a debt settlement loan.
Settled Account Status
Once you pay the lump sum or the agreed amount for debt settlement, the debt collector or the creditor would be updating your credit report to demonstrate clearly that the debt balance is $0. There would be an additional comment from the authorized person declaring that the business debts have been settled. After that, the debt settlement status would be showing up on your credit report for the next 7 years. This may impact your credit score on a short-term basis but with time, you would end up adding some positive information. This would certainly boost your credibility.
Debt settlement for your business could reap a host of benefits for you but you must be fully aware of certain facts before opting for it so that you are never ever taken by surprise.