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Advice on Business Debt Help

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Mark Cappel
UpdatedNov 23, 2022
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.

Did you know?

Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q2 2022 was $16.15 trillion. Housing debt totaled $11.71 trillion and non-housing debt was $4.45 trillion.

A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by Urban.org from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.

The amount of debt and debt in collections vary by state. For example, in Arizona, 27% have any kind of debt in collections and the median debt in collections is $1903. Medical debt is common and 12% have that in collections. The median medical debt in collections is $719.

Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.

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