Corporate Debt Restructuring Program


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Corporate debt restructuring

Corporations Can Get Finances on Track With Corporate Debt Restructuring

A corporate debt restructuring program is designed to reorganize a company's outstanding obligations. This is accomplished by lowering the balance of the debts the company has by decreasing the rates paid and increasing the time the company has to pay the debt. This increases a company's ability to meet the obligations. Some creditors may seek to gain an equity position in a company for lowering their debt.

 

What Reason Would a Company Consider Using a Corporate Debt Restructuring Program?

There are times and circumstances when a corporation finds them-self in a financial downward spiral because of internal reasons. A downward financial spiral could be because of many reasons. It could be because of a downward trend in their services or product. It could be because of bad expenditure decisions. Again, it could be for any number of reasons. Whatever the reason, when a company needs to restructure their debt, there is one consistent factor among all of them. They are seeking a corporate debt restructuring program because that haven't been able to pay their principal, let alone their interest. As a result their finances begin to move toward the red or further into the red. A company in this predicament needs to be smart about the restructuring process. Anything they can get lowered off the payoff amount and their monthly total payments is key to the survival of the company at this point.

 

What is the Corporate Debt Restructuring Process?

To better explain the corporate debt restructuring process let's first look at company's capital. Companies raise capital by borrowing money from banks and other financial institutions. This is what corporations use to fund business's expenses. Raising capital in this manner means that they are not selling interest in the company. Instead, they are paying back the principle amount they borrowed from the bank or lending institution along with interest. When a company borrows money, they need to forecast future earning and expenses. They do this to help avoid becoming financially up-side-down in the case of downward sales or higher expenses. The corporate debt restructuring process is designed to help businesses who are already in financial trouble.

 

Working Out a Settlement Between the Corporation and the Lender

Corporate debt settlement is an agreement between the lender and the borrowing company. To reach a point of agreement the lender will hold a series of meetings with the borrower. During these meetings the lender assesses the company’s overall financial situation and evaluates the company's ability to pay back the debt under the new restructure agreement. It’s at this point that the company’s financial obligations are evaluated against the company's expected incoming cash flow. This is the period when the lender decides if they're comfortable that the debtor can repay the new restructured loan and will be able to correct any underlying business issues. Corporate debt settlement is at the lender's discretion. They do have the right to sue rather than except a settlement. A lender must be careful to sue, though. They don't want to push a company into bankruptcy. If they do that they may get nothing.

 

Corporate Debt Settlement. Is it the Same as Corporate Debt Restructuring?

There are different ways and approaches to corporate debt restructuring. Corporate debt settlement is just one of them. It is designed to help a companies in a financial hardship and avoid bankruptcy. The goal is for the corporate restructuring company to negotiate a settlement with the company's lenders. If done right and under the right circumstances this can be a win, win. A win for the company because they get a lower payoff on their debt and a win for the lender because they get a percent of what they're owed rather than nothing.

 

How to Keep Your Business Financially Solid From the Start

Never start the habit of mixing you business and personal finances. There may be times when this is hard to avoid, but do avoid completely if possible.

To help keep you personal and business expenses separate set your business up properly from the beginning. Register it as a DBA, an LLC or a corporation from the start. Open a separate bank account for your business as soon as you can.
 

Use an Accountant or At Least a Good Bookkeeping System With Proper Software

If you start off with a realistic idea of where you are financially, the better. This helps you know how fast you can grow. Also, knowing where you are financially at all times lets you know if you need to adjust your business or start-up model in any way. There are many more good tips at this related article.

 

We also work with:
Private student loans
Credit card debts
Business debt


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Terms
Not all debts are eligible for enrollment due to our underwriting guidelines. Clients who make all their monthly program payments pay approximately 38% of their enrolled debt balance before fees or 67% to 71% including fees, over a term of 1 to 59 months. Our service fee is approximately 18% to 21% of the enrolled debt amount enrolled and approximately 25% to 31% of the amount our clients pay back. Not all clients complete our debt relief program for various reasons, including their ability to save sufficient funds while in our program. Estimates based on prior results, which will vary based on specific circumstances.
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We do not guarantee that your debts will be lowered by a specific amount or percentage or that you will be debt-free within a specific period of time. We do not assume consumer debt, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Not available in all states. Please contact a tax professional to discuss tax consequences of debt settlement. Please read and understand all program materials prior to enrollment, including potential adverse impact on credit rating.

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