People in debt have always been prime targets for con artists who promise them easily solutions to their debt problems. But consumers aren’t the only targets. A new generation of sharks has targeted the business debtor and the average bankruptcy lawyer in New York has many stories about clients who have fallen for these games.
Consolidation Debt May Make the Problem Worse
Often before seeking the advice of a bankruptcy lawyer, business owners will try to resolve the debt by refinancing it at a lower rate. On the surface this is a reasonable solution but if done without the advice of an experienced accountant, it could make the problem worse. Sharp loan officers may talk companies into loans they don’t really need.
Consolidating short-term debt under long-term loans means more money paid out by the borrower. Although monthly payments might be lower, the interest will be paid over a longer term so will reach a greater total. This might be a valid option to get a business through a low revenue period as long as the borrower increases payments as profits rise. An option like this should be part of a larger financial strategy.
Debt Resolution Scams
Some debt solutions aren’t just ill-advised; they are outright swindles. A debt counseling company might charge your business exorbitant fees to provide advice you can find for yourself from free. Others make promises but their plans often just involve moving money around, borrowing from one source to pay another or other schemes that simply weaken your company’s financial structure.
A few may drag your organization into illegal dealings. Unless you have a clear understanding of the financial operations taking place, you may be following advice that violates tax or investment regulations. These operations have fancy ways of cooking your books, making it look like your company is improving when the debt is simply being hidden under false numbers. Any bankruptcy lawyer knows even if you don’t break the law intentionally, your company will suffer when the authorities discover your actions.
Bankruptcy Is a Reasonable Solution
Business owners may view the act of hiring a bankruptcy lawyer as a failure but in fact it is a new lease on life for your organization. It allows you a chance to step back from your debts and come up with a sound plan for restoring you company to health while still paying all or most of your debts. Organizations from micro businesses to multinational corporations have benefited from Chapter 11 bankruptcy.
If you have reached the point where bankruptcy is the best solution for your company, consult a bankruptcy lawyer before proceeding. An attorney advises you where this is the right choice for your organization and ensures the filing proceed in a way that is best for you and your creditors.
Don’t fall for pie-in-the-sky loan scams. A bankruptcy lawyer in New York offers real solutions to your debt problems.