Small business owners working with attorneys

Options Small Businesses Have When Dealing with a Debt Collection Agency

When you own a small business, it’s easy to accumulate debt. Sometimes, sales drop off for no apparent reason. Other times, rent and inventory prices rise without warning. Although taking on a certain amount of debt comes with the territory when you own a small business, too much of it can quickly become a big problem. Fortunately, if your small business has attracted the attention of debt collectors, there are steps you can take to address this issue. In this article, we discuss options small businesses have when dealing with a debt collection agency. 

Commercial Debt vs Consumer Debt

The Fair Debt Collection Practices Act (FDCPA) is a federal law that protects consumers from aggressive debt collectors. The act contains strict requirements with which debt collectors must comply when attempting to collect a debt. However, the act strictly applies to consumer debt, which means that small businesses are more vulnerable to aggressive collections tactics than consumers. Fortunately, though, small businesses are not without options when it comes to dealing with debt collectors. 

Options for Dealing with Debts Collectors 

If your small business is dealing with a debt collection agency, you should take the following steps: 

Negotiate with Debt Collectors

Debt collectors are after one thing: money. And although a debt collector can sue you to collect a debt, this can be expensive and time consuming. Therefore, debt collectors are often willing to negotiate with small businesses regarding the amount owed. For small businesses, this is often results in debt restructuring. If the debt collector agrees to restructure your debt, you may be able to change the total amount owed and increase the time period over which you can pay the debt back.

Report Debt Collectors that Break the Law

As noted above, small business debts are not covered by the FDCPA. However, this doesn’t mean that small businesses are without rights when it comes to debt collectors. If you believe that a debt collector has violated the law in its dealings with your business, you can report this behavior. Depending on your situation, you may be able to report the debt collector’s unlawful or unethical behavior to the:

  • Consumer Financial Protection Bureau
  • Federal Trade Commission
  • State attorney general

Contact a Debt Collection Lawsuit Attorney 

Finally, before taking any of the steps outlined above, you should contact a debt collection defense lawyer as soon as possible. When you contact Fullman Firm for assistance with your debt-related issue, our California debt collection lawsuit defense attorneys will advise you of your rights and pursue a successful resolution of your situation. We have a strong reputation as skillful negotiators and aggressive litigators, so we have the ability to provide you with excellent legal representation regardless of your unique situation. Please contact us to schedule a free initial consultation.