What are my options if my business cannot pay its debts?

If your business cannot pay is business debts, you have several different options available to you. The right option for you is going to depend on the state of your business as well as on the amount and type of debts you have:

• You can try to apply for a debt consolidation loan that will give you the flexibility to be able to make your payments. A debt consolidation loan lets you consolidate all of your debts into one big debt. This new debt may have a longer repayment period and thus lower monthly payments. It may also have a lower interest rate, which could also result in a lower monthly obligation. This is usually the best option since it allows you to preserve the businesses credit rating
• You can attempt to settle the business debt. Just like with personal debt, this involves negotiating a deal with the creditor in which they agree to accept a smaller amount than the total balance that is owed on the debt. Usually, you will need to be able to come up with a lump sum of cash that is somewhat close to what you owe in order to get them to agree to this; you also usually need to be delinquent or behind on payments before they'll negotiate. This can hurt your businesses credit rating, but is a better alternative to bankruptcy
• Bankruptcy is, however, an option for you- although it should be one of last resort. A chapter 11 bankruptcy will allow your business to continue to operate while restructuring your debts, while a chapter 7 can result in the business ceasing to exist and the debts also being wiped out with it.

To get help deciding what option is best for you, you should strongly consider speaking with an experienced debt settlement lawyer for assistance.