business debt consolidationBusiness Debt Consolidation could be your ticket out of financial hot water. Are you having trouble paying your bills? Getting dunning notices from creditors? Are you worried about losing your business? Business debt consolidation may be able to lower your cost of credit through a 2nd mortgage or a home equity line of credit. Since these loans use your home as collateral, interest rates will be lower. But remember, if you can’t make the payments — or if your payments are late — you could lose your home.

Congress has recently made sweeping changes to the bankruptcy laws. The net effect of these changes is to give consumers more incentive to seek bankruptcy relief under Chapter 13 rather than Chapter 7.

Chapter 7 is known as straight bankruptcy, and involves liquidation of all assets that are not exempt.

Chapter 13 allows people with a steady income to keep property, like a mortgaged house or a car, that they might otherwise lose through the bankruptcy process. In Chapter 13, the court approves a repayment plan that allows you to use your future income to pay off your debts during a three-to-five-year period, rather than surrender any property. After you have made all the payments under the plan, you receive a discharge of your debts.

Bankruptcy is generally considered the debt management option of last resort because the results are long-lasting and far reaching. Perhaps you qualify for the government’s recently expanded small business loan.

Financial contracts can be very confusing. Before signing yourself to a major long term business debt consolidation commitment have an attorney, familiar with financing and taxes, examine and explain the details (where the Devil is). A good tax finance attorney can save you many times his fee over the years, not to mention possible legal problems.

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