New Hampshire Business Debt Relief Lawyers: Your Guide to Navigating Financial Hardship
Running a business is hard work. As an entrepreneur in New Hampshire, you’ve probably had your fair share of sleepless nights worrying about making payroll, covering operating costs, and staying afloat during slow periods. And with the economic fallout from COVID-19, many small business owners are struggling under mounting debts.If your New Hampshire business is facing serious financial hardship, don‘t go it alone. There are experienced New Hampshire business debt relief lawyers who can help you navigate this challenging time. This guide will give you an overview of your debt relief options, pros and cons to consider, and how an empathetic legal advisor can defend your interests.
Common Causes of Business Debt
Before we dive into debt relief strategies, let’s look at some of the common reasons New Hampshire businesses take on more debt than they can readily repay:
-- Cash flow problems – When income fails to consistently cover expenses, you may rely more on credit to stay open. Seasonal slow periods or losing a major client can trigger cash flow issues.
- Expansion costs – Opening a new location or upgrading facilities often requires financing. But if sales don’t meet projections, the debt can become unmanageable.
- Emergencies – Whether it’s replacing equipment after a fire or flood, or covering payroll during a pandemic, emergencies can force you to take on debt just to stay afloat.
- Industry changes – Evolving technology, consumer preferences, and increased competition can reduce profits. Debt taken on during better times can become unsustainable.
- Personal use of funds – Some business owners intermingle personal and business finances, using credit to support their own lifestyle. This makes the debt the business’s problem.
Overview of Debt Relief Options
If you see no way to catch up on overdue payments, meet credit obligations, and get out of debt, talk to a business debt relief lawyer before your situation gets worse. Here are some of the most common debt relief options they can help you pursue:
Debt Consolidation
With this approach, multiple business debts are combined into one larger loan, often at a lower interest rate. This makes payments and tracking easier. A debt relief lawyer can negotiate with creditors and handle the consolidation process.Pros:
- Lower monthly payments
- Reduced interest costs
- One payment vs multiple
Cons:
- Closing costs and fees
- Risk of secured debt on business assets
- Temptation to take on more debt
Debt Settlement
Your attorney negotiates directly with creditors to settle on a smaller lump-sum payment that satisfies the debt. This usually requires 20-50% of the amount owed.Pros:
-- Settle debt for less than full amount
- Avoid bankruptcy
Cons:
- Damaged credit
- Possible tax implications
- Creditors may balk and pursue legal action
Bankruptcy
As a last resort, filing for bankruptcy can eliminate or restructure debts you can’t pay. Chapter 7 liquidates assets to pay creditors. Chapter 11 reorganizes finances and establishes a repayment plan.
Pros:
- Eliminate eligible business debts
- Stop creditor harassment
- Keep operating and rebuild
Cons:
- High legal fees
- Damaged credit rating
- Loss of assets/control (Chapter 11)
Key New Hampshire Laws and Precedents
New Hampshire business debt relief lawyers can help you take advantage of state laws and precedents that may work in your favor. Here are some examples:
-- New Hampshire is an “opt-in” state for federal bankruptcy exemptions under Code 522. This means you can choose either NH exemptions or federal ones, depending on which protect more assets.
- NH statute 511:2 exempts equity in your primary residence up to $120,000. This applies in bankruptcy proceedings.
- Business assets like inventory, equipment, and tools of trade are exempt up to $10,000 under NH statute 511:2(XVIII).
- Precedent set by In re Weinstein allows converting non-exempt assets to exempt ones pre-bankruptcy. Your lawyer can advise if this is applicable.
- NH statute 511:2(XI) provides exemptions for personal property, protecting things like your vehicle.
Finding the Right Attorney for Your Situation
The legal intricacies of debt relief make having an experienced advisor essential. Here’s how to find the right New Hampshire business debt relief lawyer for your needs:
- Search state bar association directory – The New Hampshire Bar Association lists attorneys by location and practice areas like debt relief and bankruptcy.
- Ask other business owners – Those who have navigated debt relief can recommend lawyers who helped them. Chambers of commerce are good networking resources.
- Interview several options – Narrow down your list after brief consultations, then have in-depth discussions with one or two top choices.
- Look for empathy and understanding – You want an advisor who listens, understands your situation, and works as a true partner.
- Make sure they have debt relief expertise – While any business lawyer can take your case, those focusing on debt relief know the process best.
- Discuss fees upfront – Debt relief help can get expensive. Be clear on what services are covered and what hourly rates apply.