Creditor Actions Over Rising Debt

TAMPA, Fla., July 30, 2013 /PRNewswire-iReach/ -- Anxious business owners call Emerge180 each week with a similar debt dilemma. Rapidly growing business debt threatens the financial stability of the company and the business owner.

(Photo: http://photos.prnewswire.com/prnh/20130730/MN47341)

"Emerge 180's mission is to help owners negotiate the difficult decisions needed to save the company and get it back in solid shape," says CEO Jonathan Field. "Our company's expertise over twenty years involves creditor negotiations, tax services, and capital funding to restore small and medium- sized businesses."

Expert Advice

Expert help should include advice and plans that take into consideration the variations of creditor and debtor rights in different states. During the current economic slump, debts rise, income slows and in the stress of the situation, owners sometimes ignore financial problems until they become critical.

A Texas trucking company found itself in this situation. A creditor for an obligation more than a year overdue contacted the sheriff to legally seize and sell company assets. By ignoring the financial problem it created a near catastrophic situation.

Proactive Plans

A proactive plan can avoid this kind of debt crisis. Delaying negotiations with past due creditors only leads to additional charges. When the debt is ignored, harassing phone call increase and the business owner's stress rises. Meanwhile, costs escalate.

When a company fails to pay its obligations, those bills may go to collection agencies where fees of up to 20% are added to the original invoice. If a lawsuit is filed, the creditor can include interest on the amount owed up to 18% annual interest, attorney fees up to 35% of the debt, and the cost to file which ranges from $300 to $800, depending on the court.

These significant additions eat away at money needed to pay other bills and operational expenses. Procrastination, delay and indifference can increase the original debt up to 61%.

Interest Added:             $1,800    (18% of $10,000)

Court Costs:                 $800

Attorney Fees:              $3,500    (35% of the debt)

Original Debt:               $10,000

Lawsuit Total:        $16,100*

*This is the amount the creditor could and probably will be awarded if it goes to judgment.

In one case study an entrepreneur ignored repeated phone calls, failed to seek out help and ended up in court with a creditor. Without grounds to dispute the debt, and with all the additional expenses, an $18,000 debt rose to $30,000.  Facing the problem early and getting expert assistance in the beginning could have saved thousands of dollars on this single situation.

About Emerge180

Emerge180, a national firm based in Tampa, Florida, has been helping businesses avoid financial disaster since 1993. As experts in creditor negotiations and tax resolution services, Emerge180 helps businesses work through financial crises, and creates plans that re-position their clients for success. An A+ Accredited Business with the BBB, Emerge180 has facilitated the financial turnaround of thousands of companies…and, in so doing, the preservation of tens of thousands of jobs.

Media Contact: Media Relations, Emerge180, 1-800-805-1138, [email protected]

News distributed by PR Newswire iReach: https://ireach.prnewswire.com

SOURCE Emerge180