The company’s debt relief is very likely to involve a client and the participation of some third party, such as a credit counselor, lawyer or banker. Depending on the type of relief sought, solutions are likely to vary. An advisor, for example, can help a corporate customer continue to negotiate with creditors without filing for bankruptcy. A lawyer, on the other hand, may be involved when a bankruptcy protection filing is the best solution. Investment banks can offer corporate debt relief to qualify customers in the form of corporate finance, which can lead to the sale of certain assets to generate cash.
Credit counselors can help clients come up with a corporate debt relief program that allows the business to maintain vendor and vendor agreements and protect assets. For example, if a business is able to meet financial obligations, it is possible under certain conditions for creditors to attempt to access a business owner’s personal assets. A consulting professional could negotiate with creditors on behalf of clients to prevent this from happening, and instead create sensible repayment terms for debtors. The result may be a greater amount of time for a company to service debt at potentially better rates for the debtor. If a company becomes ineligible for federal taxes owed, a government agency can agree to any repayment plan so that the entire debt does not have to be paid right away.
An economic restructuring may be necessary to create the company’s debt relief. In this process, the debt can be consolidated or the terms of any agreements can be changed. If the creditors are not cooperative and a business cannot find any relief otherwise a bankruptcy filing may be necessary.
Bankruptcy may seem extreme, but it can provide some protection to debtors as these business owners try to regain profitability. This form of corporate debt relief can eliminate disputed communication and unwanted inquiries via creditors due to the involvement of a bankruptcy judge. Lawyers and investment bankers can advise corporate clients throughout this process so that the debt is restructured in such a way that the business can continue to operate throughout bankruptcy and eventually become a solvent.
Selling all non-core assets can be a way to generate some much-needed capital and avoid a bankruptcy filing. Market conditions must be in place to avoid selling these items for less than they are worth. Investment bankers offer these services and can advise a business through the sale of assets, after which some profits may be directed towards debt relief.