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Credit Education > Debt Management Help > How to manage with non-priority debts in business

How to manage with non-priority debts in business

By Janet Lacey
Published: Monday, July 21st, 2014

Non priority debts are debts that the creditor cannot deny you like liberty or essential goods and services. Some of these debts will include: benefits overpayments, water and sewage payments, credit debts, parking payments, student loans, and even money lent from close friends and relatives. In business, a person cannot be sent to prison for missing payments of these debts but he should state why they have not been paid. Failure to do so will prompt creditors to take you to court.

Some business debt solutions that will guarantee payment of the non-priority debts will include dealing with the creditors yourself. For a business owner, the only way he can ensure that creditors will not be quick in resulting into court orders is to sit down with them and be able to assess the whole situation at hand. Arrange for meetings early enough so that you can arrange a payment plan that will be okay with the business and the creditors. This will prevent them from confiscating the business’s assets.

The business can also ask for a debt management company for assistance in paying its debt through a debt management plan. This process has been used by many insurance companies as business debt solutionsto prevent the company/business from collapsing. The management plan usually is agreed upon by the debt plan and the company that seeks their assistance. Payment procedures should be followed before signing of documents and plans implemented before the plan is put into action.

Through loan consolidation, the business can put all its debts into one loan. As much as it is not a good idea to take a new loan so that you can be able to pay back another loan, this has been used as one of the business debt solutions that can help the company pay the urgent debts first then concentrate on the rest. But you are advised that whenever you take this type of loan, you should have a repayment plan to pay back the loan before long overdue. Before requesting for any loan, you are advised to get some advice from a financial advisor.

Finally the business owner can apply for an individual voluntary agreement. An individual voluntary agreement is a choice that one usually takes in order to avoid bankruptcy. It is an agreement between the creditor and the debtor which involves any amount of money payable as per the agreed date.

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