Debt settlement is a vital tool for many small businesses that are struggling to keep up. Whether a business is in debt due to a business credit card or other loans, debt negotiation can help the company out of a downward financial spiral. Commercial debt negotiation can be conducted by a debt negotiation service, or the debtor can handle it by contacting each creditor and trying to clear debt or reduce payments for a period of time.

You can find debt settlement information online and through debt settlement services and training programs. If you want to become a debt settlement processor, you will have to have some training in the field. To get debt settlement education and training, check out options such as:

1. Online training courses that teach the best methods for debt settlement negotiation.

2. Seminars that are quick and convenient.

3. In-person training options.

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The best contacts and resources to help you get it done

Take online courses to learn about mortgage or credit card debt settlement

Online courses are the fastest way to learn about debt settlement for businesses. These courses can be taken on your own time and will teach you the skills necessary to negotiate debt settlements that can keep a businesses open. Online courses are offered in a variety of ways, including video, written courses and live teleseminars.

I recommend: Debt Zero provides a full course of training that not only provides training to negotiate debt, but also the training needed to set up your own debt settlement company. MSTARS provides live, online training sessions for basic and advanced negotiating skills involved in debt settlement. Accountants can earn continuing education credits by taking an online course from CCH on mortgage workouts.

Enroll in an in-person debt settlement program training course

To get the training you need to become a debt negotiator, you can also take brick-and-mortar classes. Many times such training is attached to a job at a specific debt company, but you can also find live classes through debt organizations.

I recommend: The International Association of Debt Arbitrators provides a two-level debt settlement course taught by experts in the industry. The Debt Settlement Branch provides business opportunities for those who want to work as a debt negotiator, complete with its own training program.

Attend seminars to learn more about the skills needed to settle business debt

Seminars are a good educational opportunity for both novices and experts in debt settlement industry. These conferences and sessions will teach you about the latest techniques for working with businesses and their creditors. You can also network with other debt negotiators from around the country.

I recommend: The Association of Settlement Companies provides an annual conference where you can network with other debt settlement experts and attend many educational events. The American Association of Debt Management Organizations holds an annual conference that provides educational opportunities for those who work for debt management organizations.

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Helpful advice for making the most of this Guide

• •  You can also train to handle tax debt settlement issues, but additional education and knowledge of tax rules will be necessary.

Debt settlement is an option used by businesses in financial trouble. Debt settlement companies contact creditors and negotiate lower debts. For example, a creditor might allow a business to pay back 50% less than the amount owed. It benefits the creditor because they still get a portion of their money, which is more than they get if the business files for bankruptcy. Payment plans sometimes take a few years to clear debt.

Typically, business debt settlement is the last resort before filing bankruptcy. While debt settlement programs do leave credit badly bruised, the lasting effect is much less than that of bankruptcy. Bankruptcy can stay on your credit report for 10 years and it is public record. Anyone, including customers, neighbors and competitors, will know if you file for bankruptcy. Debt settlement negotiation stays on your credit for 7 years at the most. In some situations a legitimate credit repair firm can get the negative marks removed from your credit report.

Three major benefits of business and credit card debt settlement are:

1. Avoiding bankruptcy

2. Paying no attorney fees to handled owed accounts

3. Using debt negotiation to free up funds

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Decide if debt negotiation is right for you

Since debt negotiation is a near last resort, you must decide if your company has exhausted all other options. You may want to consider selling off part of your business or scaling down operations. If you can't achieve this, debt settlement may be the best option.

I recommend: Financial Firebird Corporation provides an online questionnaire to help you decide if debt settlement is the best alternative. Clear Debt Solution, which provides a debt analysis calculator, contacts you to discuss your results based on the information you provide.

Seek the help of debt settlement services

Debt settlement information is overwhelming; it's best to leave debt negotiation to the professionals. The better the company, the easier clearing your debt will be.

I recommend: American Finasco Incorporated boasts over 30 years of combined debt settlement experience working with businesses of all sizes. CuraDebt, Inc. sets itself apart from the pack with a team of psychologists, lawyers, financial advisors and credit arbitration experts working on your side.

Rebuild credit after debt negotiation

After debt negotiation, bruised credit haunts businesses. The only thing to do is build it back up again. You can either do this by yourself or seek the help of a respected credit building company. The best way to restore business credit and earn a high credit score is to pay your bills on time. The more positive accounts you have that report to a credit agency, the better.

I recommend: The website RentREPORTERS helps you build your credit by verifying current rent payments, including commercial rent, and reporting them to the credit bureaus. Choice Credit Group offers professional help for businesses that need to build positive credit.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Some credit repair companies claim big things, but don't deliver. Make sure you receive recommendations or a guarantee before you sign anything. After debt settlement, the last thing you want to do is lose more money.
• •  Lenders do not always agree to debt settlement, especially in high dollar cases, and may take you to court for the entire balance and all legal costs incurred to collect the debt.

Debt settlement is the process of negotiating how debts too large to be repaid will be handled. In this case, an ounce of prevention is worth a pound of cure, but sometimes debt just can't be avoided. Once you're in dept too deep, it's time to settle. You can do this on your own or you may wish to seek the aid of a consumer or business credit-counseling association. Most credit counselors will give you an initial assessment for free so don't be afraid to shop around after reading up on the following terms.

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Bankruptcy

Bankruptcy is a debt settlement initiated through a branch of court that exists specifically to handle financial settlements for consumers and businesses. Depending on which sort of bankruptcy you file for, some of your assets may be seized and sold to pay for part or all of the debt, so consider your options carefully.

I recommend: Nolo describes the advantages and disadvantages of various bankruptcy types in its "What is Bankruptcy?" primer.

Debt relief

Debt relief is, in short, anything that gets you out of debt. It may come in the form of bankruptcy, adopting a budget and sticking to it, or reaching a debt settlement on your own or with the aid of a debt settlement negotiator.

I recommend: Clear Debt Solution gives you a crash course on what debt relief means.

Secured and unsecured debt

Secured debt is a debt that's backed by specific goods or other sources of revenue, also known as collateral. For example, a car loan is a secured debt because if you forfeit the loan payments, the bank can take possession of the car. Unsecured debt is a debt not backed by any sort of collateral. Collateral might be seized or forfeited as part of a debt settlement.

I recommend: Advantage Credit Counseling Service gives definitions and examples of both secured and unsecured debt.

Debtors and creditors

A debtor is a person or business entity that owes money to another person or business entity, which is the creditor. Creditors also may be referred to as lenders and would be considered the aggrieved parties in most types of debt settlement.

I recommend: Cornell University Law School gives an overview of the different types of creditors and how debtor-creditor law applies to them.

Commercial or business credit counseling

Commercial or business credit counseling is designed specifically to meet the needs of a business, as opposed to a consumer's needs. Business credit counselors work with you not just to pay off your business debt in a debt settlement, but also to maintain the financial viability of the business and establish a functioning financial model.

I recommend: Commercial Debt Counseling gives an overview of how business credit counseling works.

Cash flow

Cash flow or cash earnings is the term for the net income left over after business expenses have been paid. Increasing cash flow is often critical for avoiding the need to enter a debt settlement plan or, once in the plan, is a stated goal.

I recommend: The FXC Newsletter investment glossary gives a detailed definition of cash flow and how it is calculated.

Debt negotiation is the process of reducing or eliminating both secured or unsecured debt from an individual or corporation who can no longer pay for the debts they owe. A debt settlement program is usually performed as a way to stave off bankruptcy and pay back as much of the debt as possible with the hopes of limiting the adverse effect on an individual or corporate credit rating.

Take the time to learn the basics associated with debt settlement so that you can determine how to apply it to your current situation. Here are some resourceful links to help get you started. Think of this as "debt settlement for beginners."

1. Learn about tax debt negotiation by reading the websites of companies that specialize in that service.

2. Educate yourself on companies that specialize in credit card debt settlement.

3. Learn about debt negotiation through organizations dedicated to reputable debt settlement companies and programs.

Action Steps
The best contacts and resources to help you get it done

Educate yourself on tax debt settlement by consulting with companies that provide such a service

There are many companies within the United States that specialize in clearing or reducing the tax debts for individuals and corporations. Through a process called an 'offer-in-compromise,' certain individuals or corporations will have a reduced amount of tax debt accepted by the federal or state government to clear any liability they potentially owe.

I recommend: Go to the website for JK Harris to learn more about tax debt settlement options. The company Tax Incorporated also helps settle IRS and state tax debt throughout the country.

Find credit card debt settlement information from companies who perform settlement services

There are many companies in the United States that specialize in credit card debt settlement. Acting as a middle man, they contact the creditors and negotiate a reduction in your overall debt so that you can become debt free. It should be noted that this might have an adverse effect on your credit, depending on where your credit is when the process starts. Take the time to read about credit card or unsecured debt settlement options.

I recommend: Go to the website for Debt Workout.com. They not only provide solutions to settle credit card debt, but detail the process of how a debt settlement program works as well. Debt Settlement 411 also details the process for potential clients.

Educate yourself on debt settlement by reading organization websites

Because commercial debt negotiation is such a large business within the United States and around the world, there are many companies that have sprung up that might not be the most reliable. Because of this, several nationally recognized associations have popped up that pride themselves for having reputable debt settlement negotiation companies as members. They also provide a bevy of reliable information to individuals and corporations that may need to go through the debt settlement process.

I recommend: Visit the website for The Association of Settlement Companies for additional information on reputable debt settlement companies. Also see the International Association of Professional Debt Arbitrators for more infromation.