If you have been sued for business debt in California, then you are not alone. With so many small businesses hurting during the pandemic, debt collectors are still coming after small businesses who can’t pay their lenders. In fact, I’ve had an uptick in people calling me about American Express business debt settlements. If you are facing a debt collection lawsuit for your business debt and you don’t want to file bankruptcy, then a debt settlement could be a way out. A debt settlement is a negotiation between the small business owner in debt and the lender that the business owner will pay a greatly reduced amount of the debt owed in a lump sum or with a payment plan over an extended period of time. The lender would rather accept a debt settlement than have the business owner declare bankruptcy and receive none of the debt repayment.
For example, our client took out a merchant loan from Bank of the Internet/On Deck Capital for $6,000. Our client’s business went under and he was stuck with an outstanding balance due of $7,321. The debt was sold to CACH, LLC, which is a debt collection entity that buys third-party debt. We negotiated a debt settlement with CACH, LLC for a lump sum payment of $447.37. We saved our client approximately 94% of the total amount due.
What You Should Do If Sued for Business Debt in California
If your business is being sued for debt, then you’ve probably exhausted all of your options in trying to pay back your loans and are now wondering how to deal with business debt collectors. Many loan terms are seemingly unfair to businesses and drive business owners deeper into debt with their outrageous policies.
For instance, our client took out a small business loan from LoanMe for $20,000. The terms of the agreement were that the loan carried an interest rate of 94% per year. Under those repayment terms, our client would have to pay $1,566.85 per month for 120 months. So, in total he would have to pay back over $188,000 for a $20,000 loan. Our client’s business started to go under, and he had only made two payments on the loan. LoanMe hired a law firm to sue our client for over $56,000, which was the principal loan and accrued interest due at the time the lawsuit was filed. Before our client was officially served with the lawsuit, he retained our law firm and we settled the debt for one lump sum payment of $15,000. We saved our client over $41,000, which was approximately 74% of the amount that was claimed due in the lawsuit.
Another client who was sued for business debt in California had taken out a line of credit with American Express for a Plum card. This particular line of credit doesn’t have a spending limit and is targeted for business owners. With this particular card, your purchasing power adjusts with the use of your card, your financial history and your payment history. Our client relied heavily on Amazon for the distribution of her product. American Express allowed our client to essentially float credit each month based on the revenue her business generated. Her balance ballooned to over $621,000. Unilaterally, Amazon decided that our client had violated their policies and stopped distributing her products, which forced her to shut down her business. American Express legal came after her for the debt, so she called us asking how to deal with business debt collectors. We negotiated to settle her account for $279,849.28, which was approximately 45% of the balance due on this account. Visit the success stories page on our web site to read about others who have found debt relief with settlements.
Many small business owners are being sued for business debt in California. Find a business debt lawyer who has experience in debt settlement and a proven track record of saving their clients’ money. We offer a free consultation to go over your particular situation and map out a plan to get out of debt. Call or text me at 858-217-5051 or go to the contact page on our website.
Daniel R. Gamez is a debt attorney serving clients nationwide and focuses exclusively in debt relief. He is licensed to practice in all state and federal courts in California and Texas. Mr. Gamez owns and operates the Gamez Law Firm in San Diego and Los Angeles, and helps people with debt problems all over the country. For more information, please contact Daniel Gamez at 858-217-5051, daniel@gamezl