To get you acclimated to this topic, commercial debt is any debt owed by a business or commercial venture. This debt is used exclusively for business expenses, asset acquisition, and improvements and is ever-present toward the start of most businesses. Commercial debt can accrue to a considerable sum, and if you are in such a situation, you are liable to pay off all the debts. Failure to pay them off promptly, or even paying the amount due when the time comes, could result in a civil lawsuit for commercial debt collection.
Nearly all businesses will accrue some outstanding debt from their inception, and it is inevitable for some of those debt payments to be past due. Due to this, the original creditors will reach out to you to obtain their due payments. Usually, you will have 90 to 120 days to pay. However, if you do not pay, you could either assign the debt, sell the debt to a commercial debt collection agency, or get sued for the commercial debt.
Getting sued for commercial debt via a civil litigation lawsuit can be detrimental to your business. A common and effective debt collection tactic, this type of lawsuit usually goes after commercial debtors to collect on commercial debt, the money you owe in addition to interest, as well as potential court and attorney fees.
There are numerous preventative measures to take prior to a civil lawsuit for commercial debts. Rather than declaring bankruptcy when you owe considerable sums of money, commercial debt consolidation, commercial debt counseling, and commercial debt settlements are alternatives for businesses that strain to pay off debts past their due dates. You generally have 20 to 30 days to file a response.
If you are already being sued (and assuming you received a formal written complaint addressed to you as a defendant), gathering information is critical. Determine if you have any debts that were already sold off or long-forgotten bills (“zombie debts”) that the creditor revived. Review your own records to determine who the creditor is and whether the debt is past the statute of limitations. Equipped with that information, prepare a response to your civil lawsuit by organizing a defense with an attorney. The attorney can help you prepare your written, formal response, point out possible strategies, and represent you in court should the civil lawsuit come to that point.
Once you show up at the hearing, the judge will decide whether you have to pay or not. If you owe a debt, set up a payment plan where you make regular, affordable payments or settle the debt for less than what you originally owed.