Debt Collection lawsuit attorney sitting with business owner client

Business Debt Collection Rights: What You Need to Know as a Business Owner

For most people, starting a business involves taking on some debt. Without the ability to take out loans for equipment, retail property, and other business expenses, most new businesses would never make it off the ground. Unfortunately, however, when a business fails to meet its financial goals, it can become difficult to make timely payments. And when this happens, debt collectors come calling. In this article, we explain your debt collection rights as a business owner.  

About Business Debt

Business debt, also known as commercial debt, is any debt owed by a commercial venture. Business debt differs from consumer debt in that it funds:

  • Business improvements
  • Business expenses
  • Business acquisitions 

Business Debt Collection Process

When a business fails to pay a debt, the creditor will usually make several attempts to collect the debt before transferring the account to a debt collection agency. If a business fails to pay its outstanding business debts within an allotted period, the creditor is permitted to assign or sell the debt to a commercial debt collection agency. Assigning a debt means entering an agreement with a third-party agency that authorizes the agency to collect the debt on behalf of the original creditor. When a creditor sells the debt to a debt collection agency, however, it usually does so for a fraction of the amount owed. The purchaser than attempts to collect the debt from the business. 

Business Debt Collection Rights

The Fair Debt Collection Practices Act (FDCPA) is a federal law that protects consumers during the debt collection process. This law establishes strict rules that debt collectors must follow when dealing with consumers. However, the FDCPA doesn’t apply to businesses. Fortunately, although business debtors aren’t subject to the protections of the FDCPA, they are not without rights during the business debt collection process. In fact, there are several ways available for businesses to protect themselves from aggressive debt collectors. For example, most states have enacted business debt collection laws. Many of these laws prohibit debt collectors from engaging in overly aggressive behavior. In addition, any business dealing with debt collection issues may turn to an experienced debt collection lawsuit defense attorney for guidance. An experienced debt collection defense lawyer will have a thorough knowledge of the laws, rules, and regulations affecting business debtors in the state of California.  

Contact a Debt Collection Lawsuit Defense Attorney 

If your business is dealing with a debt-related issue in California, you need the assistance of an experienced debt collection defense lawyer. At Fullman Firm, our California debt collection lawsuit defense attorneys know what it takes to protect businesses from debt collectors. Our experienced attorneys are known throughout California as aggressive litigators and crafty negotiators. Therefore, when you come to us for help, you can rest assured that your California business debt matter is in good hands. Please contact us as soon as possible to arrange a free consultation.