Business Debt Collection Rights: Everything You Need to Know
Business debt collection rights give businesses in debt legal protection against unfair debt collection practices.3 min read
Business debt collection rights give businesses in debt legal protection against unfair debt collection practices and defend the rights of creditors and collection agencies. Debt collection laws also regulate collection agencies' actions during the debt collection process.
Business debt, also known as commercial or corporate debt, is a monetary liability for a loan granted by one company to another business entity. Business loans are binding business credit contracts that carry strict terms.
Borrowers must recover the amount lent before the deadline passes. If the borrower can't repay the sum in time, they become a debtor and the creditor may undertake certain measures to recover the debt.
Commercial debt is defined as any debt that a business or commercial venture owes. It differs from consumer debt in that it funds:
- Business expenses.
- Business asset acquisition.
- Business improvements.
Businesses often rack up commercial debt when they are first starting out. Instead of declaring bankruptcy, businesses that are struggling with debt that is past due can turn to commercial debt counseling, consolidation, and settlement.
If your business is having difficulty repaying commercial debt, a lawyer can help reconfigure business debts by negotiating with creditors to potentially waive part of the debt.