Most businesses experience cash flow problems at some point. Presenting creditors with a viable plan may give you the breathing room to stabilize operations. Rather, it may be that the creditor sees that the business is struggling and fears that the opportunity to collect may be slipping away.
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Often, when a creditor is putting the pressure on for quick payment, it isn’t because that creditor is eager to get paid. Working with an attorney experienced in helping Ohio businesses navigate debt issues can help you regain control and find the best solution based on your circumstances and priorities. Options for Business DebtorsĪlthough business debtors don’t enjoy the same protections as consumers and don’t have the same options in the collections process, that doesn’t mean a business facing financial difficulties is powerless. Often, in a consumer case, such a lawsuit is a pressure point that allows for settlement of the debt along with the FDCPA claim. Just as important, business debtors don’t have the leverage consumer debtors do to push back against overly-aggressive collection agencies-a consumer being harassed by a debt collector can file a lawsuit under the FDCPA, seeking monetary damages and attorney fees. This allows business debt collectors to pull out the stops and be more aggressive in collection efforts, increasing the pressure on commercial debtors. The federal Fair Debt Collection Practices Act (FDCPA), which prohibits collection agencies, debt buyers, and others in the business of collecting consumer debt from abusing, harassing, deceiving or misleading consumer debtors, offers no protection for businesses, nor for individuals whose debt is commercial in nature. Business Debtors are Not Protected by the Fair Debt Collection Practices Act This discrepancy leaves struggling businesses at risk, since the seizure of operating capital, inventory, and other property can interrupt the company’s ability to generate income, worsening financial problems and potentially proving fatal to the business. As such, real estate, equipment, inventory, and even accounts receivable are vulnerable to attachment to satisfy a judgment. One of the most significant differences between individual debtors and business debtors is that individuals are entitled to several exemptions in the debt collection process.įor example, an Ohio individual is entitled to keep a certain amount of equity in a motor vehicle, a certain amount of cash, tools used to make a living, and a significant amount of equity in his or her home.Ī business, on the other hand, is not entitled to exemptions. However, neither the state of Ohio nor the federal government extends these protections to business debtors, or to individuals who have taken on debt for commercial purposes. State and federal law provide protection for consumers in their dealings with third-party debt collectors. The Law Places Few Limits on Commercial Debt Collectors
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In this article, we discuss some of your options if you are facing a commercial debt collection situation.
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But, that doesn’t mean that debt collectors hold all the cards. In Ohio, as well as nationally, business debtors do not enjoy the same protections consumer debtors do.