If you are a small business and you owe a debt, it may be helpful to think proactively and consider beginning negotiations with your creditors. This is often a good way to reduce your debt and get some relief from troublesome calls from creditors. However, if you decide to bargain with your creditors, be sure to avoid some common pitfalls. By knowing what not to do, you can increase your chance of successful negotiations.
Here are some of the most common mistakes people make when negotiating with their creditors:
Not knowing if your debt is secured or unsecured
It is critical to understand that there are two main kinds of debt: secured and unsecured.
- Secured creditors. have an interest in some sort of asset (car, boat, land, and the like). If you don’t pay the debt, this creditor is allowed to take the property.
- Unsecured creditors. These types of creditors allow debtors to purchase goods on credit without any security. If the debtor does not pay, this creditor cannot go to the debtor’s home and take back the merchandise.
Beware: some unsecured creditors may try to convince the debtor that they are actually secured creditors and will threaten to seize property. Thus, if you know whether the debt is secured or unsecured, you likely won’t be tricked by this deceptive tactic.
Contact Andrew Weisblatt
Collecting unpaid debts are essential to the success of any business. Texas attorney Andrew Weisblatt is a skilled Houston B2B business collections attorney who understands how to effectively collect from businesses that may be reluctant or unable to pay their outstanding financial obligations. To schedule an appointment with Mr. Weisblatt, call our Houston office today at 713-666-1981.