Corporate restructuring can be undertaken several ways with
positive outcomes as the goal. When it pertains to debt release, several
methods may be used to reduce your company’s liabilities. All are considered a
type of corporate restructuring so that your company may continue operations.
The most common ways to restructure corporate debt are:
- Smaller payments are negotiated on credit accounts over longer periods of time.
- Large debts are made smaller, and the difference is written off by the creditor.
- Debt is exchanged for equity in the company.
- Chapter 11 bankruptcy is filed, which reworks the debt owed.
Most professional debt settlement counselors will make every
attempt to try the first three approaches, or some combination of them and
others, before resorting to bankruptcy. Despite being more common nowadays,
bankruptcy is still considered the least beneficial.
An experienced
corporate debt restructuring service can take the ABC arsenal into
negotiations with creditors to reduce debt, sometimes slashing it significantly
from its original size. Although results vary from company to company and
situation to situation, having an advocate during corporate debt restructuring
increases a company’s chances that more savings will be found and a resolution
will happen more quickly and smoothly.
A corporate debt settlement service can also make assessments of
which form of restructuring may work best based on several factors:
- The type of creditor, such as a credit card company, bank, vendor or landlord
- The terms of the line of credit or loan, be it secured (a mortgage) or unsecured (a credit card)
- The track record your business has with each specific creditor
These are only a few of the criteria which can be used to
restructure a business’s debts. Debt release is a complicated process and can
take many forms. The key is to not wait too long to address the situation, when
pressures from poor cash flow and unpaid accounts become insurmountable.
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