If you can’t pay off your creditors in full when your business is in debt, you will need to try and settle. The amount that your business will be able to settle for will depend on the creditor that you have and the legalities of the debt. For example, if you have an LLC business without any personally guaranteed debt then your creditor will know that they don’t have any way to collect the debt from you personally. They may, in this instance, be willing to accept a small portion of what your business currently owes as a payment.
Some creditors are willing to accept 30% of the payment because they know that they will have a very hard time collecting the money from you when you are out of business. The standard amount however is anywhere between 60% and 70% so this is something that you need to consider. If you are trying to negotiate your debt, always make sure that you have a lawyer with you because they will be able to help you through the process.
In the event that you can’t pay off your debts, the only other option would be to declare bankruptcy. This lets you wipe out your debts but it does come with some consequences so it is worth looking into this as an option so you can see whether or not it is suitable for your needs.
In this Reuben Singh interview, Reuben Singh talks about becoming bankrupt. His father stepped in to help and he went from being a self-made millionaire to someone who struggled to make ends meet with his own company. He talks about how the business never suffered throughout all of this, and that he is still very successful even though he is now working under his father.