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Advice on Business Debt Help

Mark Cappel
UpdatedFeb 28, 2024

If I go on a credit card plan does it include business credit cards?

If I go on a credit card plan does it include business credit cards?

The answer to your question depends on what type of credit card repayment program you are considering, and what your needs are in regard to the credit accounts. For example, if you are planning to enter a debt settlement program, most providers recommend that you only include business debts if the business is no longer in operation and all business assets have been liquidated. Since many businesses need credit to operate, and since debt settlement programs tend to damage your credit score, attempting to settle the debts of an operating business is generally not recommended.

If you are planning to enter a consumer credit counseling service (CCCS) program, you should be able to include your business debts. Since credit counseling programs usually do not damage your credit as much as debt settlement programs, they are usually the better choice for businesses that are still in operation. However, CCCS programs can cause problems in obtaining new credit, since many lenders view enrollment in a CCCS program as the equivalent of filing a Chapter 13 bankruptcy. If have a particular type of program in mind, I encourage you to contact several providers to discuss their policies regarding business debts, and the benefits and drawbacks of including your business debts in a debt management program.

If you need help, then get a free debt consultation with one of Bill's approved debt help partners

If your business is still in operation, the best course of action would be to find a way to repay your creditors without entering into a debt management program, as debt management can make obtaining credit more difficult in the future, which could seriously impede your ability to conduct your business. Also, unlike personal debt, businesses have little protection from collection action taken by creditors. If a creditor obtains a judgment against you, it could result in business assets being liquidated to repay the debt. If you are unable to repay your business' creditors, you may want to consider consulting with a bankruptcy attorney to discuss the options available to you. Chapter 11 bankruptcy, also called business reorganization, may allow you to repay your creditors under new, more favorable terms, thus allowing you to get your business back on its feet. Again, I encourage you to consult with a qualified bankruptcy attorney to discuss if bankruptcy is an appropriate choice in your situation.

To read more about the different options available to you, I invite you to visit the Bills.com Debt Help Resources page.

The key to finding the best option for you and your business is to educate yourself about the available options, speak with providers of each option, and use the information wisely to select the appropriate program for your circumstances. I wish you the best of luck in resolving your debts, and hope that the information I have provided helps you Find. Learn. Save.

Debt statistics

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Auto loan debt was $1.607 trillion and credit card was $1.129 trillion.

According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Each state has its rate of delinquency and share of debts in collections. For example, in Alabama credit card delinquency rate was 5%, and the median credit card debt was $378.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.

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