Disputes Over Business Debt
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What is Business Debt?
Business debt is generally any outstanding payments that are owed by a business to:
- Other businesses
- The government
- Other parties (sometimes consumers)
Business debt is often a normal part of running any business. Debt can be cyclical and regular for some businesses. However, business debt becomes a problem when the business can no longer recover from the debt and begins to lose overall profits due to excessive debt.
What are Some Common Disputes Over Business Debt?
One of the more common disputes over business debt is that of liability. Determining which persons or entities are liable for business debt will depend on the way that the business is organized.
For example, in a sole proprietorship, the owner of the business is directly responsible for business debt, since the owner and the business are legally one and the same. In a partnership arrangement, the partners may share liability. The degree of liability of each partner may depend on what is written the partnership contract.
With other organizations such as corporations and limited liability companies, liability for business debt can begin to get very complex. For this reason, corporate liability will often depend on each individual debt case.
How Can Business Debt be Handled?
Business debt can be handled in a variety of different ways. A business may opt to:
- Seek negotiation, settlement or debt cancellation with creditors and other businesses
- Request an extension or exemption from certain government debts
- File for business bankruptcy (this might sound like a negative decision but it can help the business to survive)
In some cases, it may be necessary to file a legal claim in a civil court of law in order to settle a dispute over business debt. This can happen for example if two businesses can’t reach an agreement as to how certain debt will be happened. Or, one business may be claiming that there is an error regarding the debt calculations.
Lawsuits involving business debts can typically result in a monetary damages award. This award is calculated in a manner that is meant to reasonably compensate the non-violating party for any losses resulting from the debt dispute.
Do I Need a Lawyer for Handling Disputes over Business Debt?
Disputes over business debt should be resolved in a timely manner. If you need assistance with any legal disputes or questions, you should contact a business lawyer promptly. An experienced attorney can assist you in filing a claim with the court if necessary. Also, your business may profit from the legal expertise and guidance of a lawyer. This can help save your company from unnecessary expenses in the future.
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Last Modified: 10-26-2012 03:08 PM PDT
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