Knowledge is power when dealing with business debt. These comprehensive guides give you the strategies, scripts, and insider knowledge you need to negotiate better terms, protect your assets, and make informed decisions.
Essential Guides
How to Negotiate with Creditors
Learn exactly what to say to reduce debt, lower payments, and avoid default
This guide includes:
- Proven negotiation scripts for every creditor type
- Phone scripts that work (word-for-word)
- Email templates for hardship requests
- When to mention bankruptcy (and when not to)
- How to negotiate settlements (40-60% of balance)
- What leverage you have (more than you think)
- How to get written agreements before paying
Use this when: You need to negotiate with any creditor—credit cards, banks, SBA, MCA companies, vendors
Read Full Guide →Personal Guarantee Liability
What you signed, when creditors can come after you, and how to protect yourself
This guide covers:
- What personal guarantees actually mean (legal breakdown)
- Types of guarantees (unlimited, limited, joint and several)
- When creditors can pursue your personal assets
- What they can take (home, car, bank accounts, wages)
- Timeline: Default to lawsuit to wage garnishment
- How to get OUT of a personal guarantee (rare but possible)
- Defending against guarantee claims
- Asset protection strategies (legal vs illegal)
Critical reading if: You signed personal guarantees on SBA loans, business credit cards, MCAs, or any business debt
Read Full Guide →Business vs Personal Bankruptcy
Which should you file? Business, personal, or both?
This guide explains:
- Critical distinction: Business bankruptcy does NOT discharge personal guarantees
- When to file business bankruptcy (Chapter 7 or 11)
- When to file personal bankruptcy (Chapter 7 or 13)
- Decision tree by business structure (sole prop vs LLC/corp)
- What each bankruptcy type discharges
- Should you file both? (And in what order?)
- Impact on business operations and personal credit
- Real-world scenarios with recommendations
Essential if: You're considering bankruptcy and aren't sure which type to file
Read Full Guide →The MCA Debt Trap
How merchant cash advances trap businesses—and proven escape strategies
This guide reveals:
- How the MCA trap works (the debt spiral explained)
- Why MCAs are predatory (40-200% APR, daily withdrawals)
- The stacking death spiral (multiple MCAs)
- Confession of judgment horror stories
- 5 escape strategies (refinance, negotiate, change banks, bankruptcy)
- Legal defenses (usury violations, FDCPA violations)
- How to stop daily ACH withdrawals (nuclear option)
- Better alternatives to MCAs
Must-read if: You have MCA debt or are considering taking one
Read Full Guide →Guide by Situation
I need to negotiate with creditors
→ How to Negotiate with Creditors - Complete scripts and strategies
I signed personal guarantees and I'm worried
→ Personal Guarantee Liability - What you're liable for and how to protect yourself
I'm considering bankruptcy but don't know which type
→ Business vs Personal Bankruptcy - Decision guide
I'm trapped in MCA debt
→ The MCA Debt Trap - Escape strategies
I need to understand specific debt types
→ Debt Types Hub - SBA loans, MCAs, credit cards, equipment, tax debt, commercial real estate
I want to compare all my solution options
→ Solutions Hub - Consolidation, settlement, restructuring, refinancing, bankruptcy
Quick Reference: Key Concepts
Personal Guarantee
Legal promise that YOU personally will pay business debt if business doesn't. Waives LLC/corporation protection for that debt.
Risk: Creditor can sue you, garnish wages, lien home, seize personal assets.
Confession of Judgment
You pre-authorize creditor to get judgment against you WITHOUT lawsuit, trial, or notice. Legal in NY, PA, OH, IL.
Risk: Wake up to frozen bank accounts, wage garnishment.
Automatic Stay
When you file bankruptcy, court order immediately stops ALL collections, lawsuits, foreclosures, garnishments.
Benefit: Breathing room to reorganize or discharge debts.
Cramdown
Chapter 11 power to reduce secured debt to current collateral value. Example: Owe $500K on property worth $300K → Reduce debt to $300K.
Benefit: Can save hundreds of thousands of dollars.
Discharge
Court order eliminating your legal obligation to pay debt. Creditor can never collect.
Difference from settlement: Discharged debt is NOT taxable income. Settled debt IS taxable (1099-C).
Trust Fund Recovery Penalty
Personal liability for payroll taxes you withheld from employees but didn't remit to IRS. Criminal liability possible.
Risk: Never dischargeable in bankruptcy. IRS can seize everything.
Factor Rate
MCA pricing trick. "1.35 factor" sounds like 35% fee but equals 100%+ APR due to short repayment period.
Reality: $50K × 1.35 = $67,500 payback over 6 months = 127% APR.
Hardship Program
Credit card company program: 0% interest for 6-12 months + reduced minimum payment. Must call and ask.
Benefit: Can save thousands in interest while you stabilize.
Offer in Compromise (OIC)
IRS/SBA program to settle tax or SBA debt for less than owed. Typically 10-40% of balance.
Requirement: Must prove inability to pay in full.
Negotiation Scripts Cheat Sheet
Opening (All Creditors)
"Hi, my name is [NAME] and I have account number [XXXX]. My business has been hit hard by [specific hardship], and I'm having trouble making my payments. I want to keep this account in good standing, but I need help. What programs do you have for businesses in financial hardship?"
When They Offer Inadequate Terms
"I appreciate that offer. The challenge is I have multiple creditors, and even with that reduction, I'm still short $[X] per month. Is there any flexibility to go lower?"
Lump-Sum Settlement Offer
"I have $[AMOUNT] available right now. If I pay that as a lump sum to settle this account in full, will you accept it and mark the account paid? I can wire it today if we can reach agreement."
Bankruptcy Threat (Use Carefully)
"If we can't work something out, my only option is filing bankruptcy. In Chapter 7, you'll get nothing. I'd rather avoid that and pay you directly, but I need realistic terms."
Before Paying Anything
"I appreciate you working with me. Before I make this payment, can you send me written confirmation of the new terms via email? I need documentation for my records."
Full scripts and strategies: How to Negotiate with Creditors
Common Mistakes to Avoid
❌ Filing business bankruptcy when you need personal
Business bankruptcy does NOT discharge personal guarantees. If you're personally liable, you need personal bankruptcy.
❌ Taking new MCA to pay old MCA
This is the MCA debt spiral. You'll end up with 4-5 MCAs, paying $1,500/day in withdrawals. Death sentence for cash flow.
Read: The MCA Debt Trap
❌ Ignoring personal guarantee liability
"My business is an LLC, so I'm protected" → Wrong if you signed personal guarantees. Creditors can come after you personally.
❌ Not getting agreements in writing
Verbal agreements mean nothing. Creditors will deny them. ALWAYS get written confirmation before paying.
Read: How to Negotiate
❌ Hiding assets before bankruptcy
Transferring assets to family/friends right before bankruptcy = fraud. Trustee can reverse transfers 2-4 years back. You can go to prison.
❌ Paying creditors with tax money
Withhold payroll taxes from employees, then use that money to pay creditors = Trust Fund Recovery Penalty. Personal criminal liability.
Read: Business Tax Debt
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Get Free AssessmentAdditional Resources
Debt Types
Deep dives on SBA loans, MCAs, credit cards, equipment financing, tax debt, and commercial real estate loans
Solutions
Compare consolidation, settlement, restructuring, refinancing, Chapter 11, and Chapter 7 bankruptcy
Debt Calculator
Calculate how long to pay off debt, total interest cost, and savings from consolidation
Free Assessment
3-minute questionnaire with personalized recommendations for your situation
Important Disclaimers
Not Legal or Financial Advice: The information in these guides is educational only. Every situation is unique. Consult with qualified bankruptcy attorneys, CPAs, and financial advisors before making decisions.
State Laws Vary: Bankruptcy exemptions, usury laws, wage garnishment limits, and other debt collection rules vary significantly by state. Verify local laws.
Tax Implications: Debt forgiveness creates taxable income (1099-C) except in bankruptcy or insolvency. Consult tax professional.